Spring Clean Your Finances: A Practical Checklist

Spring is in the air—and it’s the perfect time to not just clean out your closets, but also to organize your finances. A financial spring cleaning helps you take stock of where you are, make smart updates, and set a clear course for the rest of the year. This checklist will walk you through simple yet essential steps to review your savings, rebalance your retirement accounts, update your documents, and much more.

We’ve put together a financial spring-cleaning checklist to help you get started. We’re here to assist you every step of the way so reach out if you have any questions.

 

Why Use a Financial Spring-Cleaning Checklist?

Just as you would use a checklist for travel or home projects, a financial checklist ensures that nothing important gets overlooked. Spring is an ideal time to pause, reevaluate, and realign your financial goals. Whether you’re preparing for retirement or simply want more peace of mind, these steps can help you stay on track.

 

Step-by-Step Financial Spring-Cleaning Checklist 

 

Maximize Your IRA Contributions

If you have an IRA, contribute the maximum amount to take advantage of tax benefits and long-term growth. For the 2024 tax year:

  • The contribution limit is $7,000if you’re under 50.
  • If you’re 50 or older, you can contribute up to $8,000.

 

Review and Rebalance Your 401(k)

Revisit your retirement account and check your 401(k) performance to ensure it’s aligned with your current goals. (If you’re a Cornerstone client, we work closely with you to review and rebalance your 401(k) to help ensure your retirement plan stays on track.)

  • Are you contributing enough to get the full employer match?
  • Is your asset allocation still appropriate?
  • Does your investment strategymatch your risk tolerance?
  • Do you need to rebalance to maintain diversification?

 

Evaluate Your Investment Portfolio

If you’re a Cornerstone client, you know that investments aren’t “set it and forget it” – it’s one of the things we review during your regular strategy sessions.

If you’re not a Cornerstone client, to assess your investment portfolio we recommend asking yourself the following:

  • Are my returns helping me move closer to retirement or other financial milestones?
  • Do my investments match my risk tolerance and reflect my stage of life?
  • Are my returns in line with expectations?

Analyze Your Cash Flow and Monthly Expenses

Understanding where your money is going is a key step to organizing your financing and getting clarity.

  • Recurring monthly expenses—which ones can you cut or reduce?
  • Review large, long-term financial commitments like mortgage or tuition. Are there ways to adjust for greater savings?
  • Extra cash flow—how can you allocate it toward retirement or investments?

Not sure how to estimate what you’re expenses will be in retirement? Read 5 Steps to Estimate Retirement Income Needs

Use Your Tax Refund Wisely

If you’re receiving a tax refund, decide how to use it strategically:

  • Pay down debt to save on interest payments.
  • Boost your emergency fund or retirement savings.
  • Invest in areas that align with your long-term goals.

Organize Your Estate Planning Documents

Having your estate documents in order is a true act of love for your family. Ensuring your will, power of attorney, and medical directives are up-to-date and accessible goes a long way to reduces stress during challenging times.

  • Will and estate plan
  • Power of attorney
  • Advance medical directives
  • Letters of instructions
  • Other critical documents

Download our Important Documents Checklist for help organizing your vital personal, health, and financial information – In Case of Emergency: Organize Your Vital Info

Review Insurance Coverage

(If you’re a Cornerstone client, we regularly during your insurance coverage during your strategy session as one of the five essential areas of comprehensive financial planning.)

Life is full of surprises, and having adequate insurance coverage can provide a safety net. Make sure your policies reflect your current needs:

  • Does your life insurance align with your family’s current needs?
  • Are you adequately covered by disability and/or long-term care insurance?
  • Do your home and auto policies provide sufficient protection?

Check Your Credit Report for Errors and Fraud

Regularly checking your credit report helps you catch errors or signs of identity theft early. Check for:

  • Look for unfamiliar accounts or inquiries—these may indicate identity theft.
  • Be careful of hard inquiries—businesses checking your credit for loan applications (these can impact your score for up to two years).

Reevaluate Your Financial Goals

Financial priorities shift over time, so take a moment to:

  • Identify new goals based on life changes, write them down.
  • Reassess older goals – are they still relevant? How can you move them forward?
  • Adjust your savings and investment plan accordingly.

Starting with Organized Finances

Spring cleaning your finances may not be the most exciting task, but it’s one of the most rewarding. Just like living in a clean and organized home feels great, having your finances in order brings clarity and confidence.

By taking a few practical steps each spring, you position yourself for a more secure and stress-free financial future. Our team is here to guide you every step of the way.

Here’s to a fresh start and a prosperous future—happy spring cleaning!

Complimentary Client Shredding

The Month of May in Both Offices:

M-Th   8am – 5pm

Fri        8am – 3pm

As a value-added service for our clients, you’re always welcome to bring in paper documents for shredding – no appointment needed. It’s one of the many ways we aim to make managing your financial life easier.

We also place secure shred bins in our lobbies during May and October, making those ideal times to clear out larger quantities.

What can be shredded:

√ Paper documents (paper clips and staples are okay)

× No binder clips, three-ring binders, CDs, DVDs, or other electronic media.

Download How Long to Keep Paperwork

Not a Cornerstone Client?

Let’s build a plan that fits your goals—schedule a strategy session with our team today!

Sioux Falls: 605-357-8553

Huron: 605-352-9490

Email cfsteam@mycfsgroup.com 

CSP #769688 Exp. 4.10.26

TAX-SAVVY INVESTING: UNDERSTANDING THE ESSENTIALS

When it comes to your wealth, minimizing your tax liability with tax savvy investing can make all the difference. Understanding key concepts and tax strategies like Roth IRA conversions, cost basis, reinvested dividends, and how capital gains and losses are applied can help you keep more of your investment earnings and avoid costly mistakes.

 

Understanding Roth IRA Conversions

A Roth IRA conversion – whether you convert part or all of your traditional IRA into a Roth IRA – is a taxable event with pros and cons. The amount you converted is subject to ordinary income tax. It might also cause your income to increase, subjecting you to the Medicare surtax.

  • You do not have to convert all of your IRA to a Roth. It is best to prepare a tax projection and calculate the appropriate amount to convert.
  • Roth IRA conversions are not subject to the pre-age 59½ penalty of 10%.
  • Many 401(k) plan participants (if their plan allows) can convert the pre-tax money in their 401(k) plan to a Roth 401(k) plan without leaving the job or reaching age 59½.

 

Understanding Cost Basis

What Is Cost Basis and Why Does It Matter?

Cost basis represents the original value of a security, typically the purchase price, adjusted for stock splits, dividends, returns of capital, and other corporate actions. On your Raymond James Comprehensive Statement, cost basis is displayed for securities held in nonqualified accounts, giving you a basic snapshot of potential capital gains or losses.

 

How to Use the Cost Basis on Your Statements

Your statements provide unrealized and realized gain/loss calculations as a courtesy to help you monitor your investment performance, but they are not a substitute for official tax documentation.

Cost basis figures on monthly, quarterly, and year-end statements should never replace Form 1099-B when preparing taxes. Here’s why:

  • Adjustments Can Occur: Between year-end statements and the issuance of 1099s (typically mailed in mid-February), events such as wash sales, income reallocation, and corporate actions may impact cost basis calculations.
  • Avoid Errors: Relying on statement figures instead of 1099-B can result in incorrect tax reporting and potential IRS issues.
  • Beyond Taxes: Cost basis on statements should not be used for reconciling account fees, performance tracking, or deposits/withdrawals.

If you’re unsure how cost basis impacts your tax strategy, please reach out to our team. We’re here to help!

 

Understanding Reinvested Dividends

What is a Reinvested Dividend and Why Does it Matter?

This important calculation that can save you a bundle.

A reinvested dividend is when your mutual fund dividends are automatically used to buy additional shares instead of being paid out as cash. If you have mutual fund dividends that are automatically used to buy extra shares, each reinvestment increases your tax basis in that fund. An increase in your tax basis in the fund can reduce your taxable capital gain—or increase your tax-saving loss—when you sell shares.

 

How to Avoid Double Taxation on Reinvested Dividends

If this applies to you, tracking reinvested dividends can save you a bundle.

  • If you forget to include reinvested dividends in your tax basis, you could end up paying taxes twice—once in the year they were reinvested and again when you sell the shares.
  • Mutual funds often report the tax basis of redeemed shares, and financial institutions must report this to both investors and the IRS for shares purchased after regulatory changes.

If you’re unsure about your tax basis, check with your fund provider or reach out to us for help.

 

Understanding How Capital Gains and Losses Are Applied

What Are the Ordering Rules for Capital Gains and Losses and Why Does it Matter?

The IRS follows specific ordering rules to determine how gains and losses offset each other. Understanding how capital gains and losses are applied can help you minimize your tax liability.

How to Maximize Tax Savings with Capital Losses

If this applies to you, knowing the correct order for offsetting gains and losses can make a big difference. Here’s how it works:

  • Short-term losses must first offset short-term gains.
  • Long-term losses must first offset long-term gains.
  • If there are net short-term losses, they can be used to offset net long-term gains.
  • If there are net long-term losses, they can be used to offset net short-term gains.
  • If all gains and losses net to an overall loss, up to $3,000 can offset ($1,500 if married filing separately) ordinary income.
  • Remaining unused capital losses can be carried forward to later tax years and then considered in the same manner as described above.

Remember to look at your 2023 income tax return Schedule D (page2) to see if you have any capital loss carryover for 2024. This is often overlooked, especially if you are changing tax preparers.

Raymond James does not provide tax or legal services. This information is not intended to be a substitute for specific individualized tax, legal, estate, or investment planning advice as individual situations will vary. Please discuss these matters with the appropriate professional. Opinions expressed are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. This information has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that these statements, opinions, or forecasts provided herein will prove to be correct.

 

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

 

Investing involves risk and you may incur a profit or loss regardless of strategy selected. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Forward looking data is subject to change at any time and there is no assurance that projections will be realized.

The Family Meeting: Key to Protecting What Matters Most

If you think about family wealth, you might focus on tangible assets like investments or property. However, some of the most valuable aspects of a family’s legacy are intangible— things like traditions, shared values, and family history. These intangible elements, combined with material wealth, help define the legacy you’ll pass on to future generations. Ensuring that this legacy aligns with your personal goals and wishes is essential.

Preparing your children or other heirs for a successful financial future is key to ensuring that wealth continues to grow and benefit your family for generations. Equally important is creating a space for open, transparent conversations with your heirs, beneficiaries, or Power of Attorney, so they are equipped to make informed decisions should you become incapacitated. Estate planning isn’t just about preparing for what happens after you’re gone; it’s also about ensuring your affairs are managed according to your wishes if you can no longer do so yourself.

Holding a family meeting that includes your financial advisors can be a powerful way to help safeguard your family’s future. These meetings help ensure that your loved ones avoid unnecessary confusion and stress when it comes to managing the financial affairs of an incapacitated or deceased family member. While these conversations can be difficult, the alternative—leaving beneficiaries to navigate complex plans and assets without clear guidance—can be far more painful.

At Cornerstone Financial Solutions, we facilitate many family meetings for clients each year and have extensive experience in ensuring they are productive and meaningful. Introducing your heirs to your advisors also helps put faces to names and provides comfort, knowing there will be support in managing your estate when the time comes. With multiple generations of advisors on our team, we’ll be here for your family today and in the future.

We can host these meetings in our office, or we can arrange secure virtual sessions for families spread across the country. Whether or not you choose to include us in the conversation, we’re happy to provide the resources and space you need. There is no cost or obligation involved—only the confidence that comes with planning for the future.

Not a Cornerstone client?

If you’re ready to take the next step, we can help guide you through every step of the process. Contact us to plan a conversation that ensures clarity, confidence, and peace of mind for generations to come.

Contact us today at 605-351-8553 or cfsteam@mycfsgroup.com if you’d like to schedule an introductory strategy session.

CSP #635767 Exp.10.28.25

Any opinions are those of Cornerstone Financial Solutions, Inc. and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herin will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance is not indicative of future results.