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Time for financial spring cleaning?
Your money
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Now that spring is here, you might decide to spruce up your home. But you also may want to do a “spring cleaning” on your financial house.
What steps should you take to tidy up your financial situation? Some of the moves are the same as those you’d use to reinvigorate your house and yard. Consider the following:
• Get the clutter out. When you open your closets, you probably ask yourself: “Why on earth do I need that?” Strange as it may seem, when you open up your investment portfolio, you might have similar thoughts. Perhaps you’ve had some investments so long you no longer remember why you bought them. If you aren’t sure why you own a stock, bond or other type of security, sell it and use the proceeds to invest in something else that is more useful in meeting your goals.
• Rearrange the furnishings. Over time, and almost without your being aware, the furnishings in a room can get “out of balance.” Perhaps you have too many chairs in one corner, or an entertainment center is crowding a couch. Usually, with rearranging, you can get things back in order. The same is true with your portfolio: Over time, it can become unbalanced, with too much of one investment and too little of another. This situation could prove hazardous to your finances, especially if the imbalance means you are taking on too much risk or, conversely, if your holdings have become too conservative to provide the growth you need. A well-balanced portfolio can help you achieve your goals and accommodate your risk tolerance, but it won’t assure you of a profit or protect against a loss in declining markets.
• Update your home’s “look.” If you’ve lived in a place a long time, the rooms and even landscaping can start to look frumpy. Perhaps the way you lived in 1997 isn’t quite the way you’d like to live in 2007. So, make changes. And your portfolio might also have elements don’t reflect realities of your life, such as marriage, divorce, a new child, a child going to college or impending retirement. If this is the case, you may need to adjust your holdings.
• Check your security system. It’s a good idea to check your smoke detectors and alarms to see if they are functioning. And, just like your home’s security, your life insurance needs periodic checking. If you’ve moved to a more expensive home, or if you’ve added a child, is your insurance sufficient? Or, if you have remarried or divorced, have you changed your beneficiaries?

Cardella is a financial advisor for Edward Jones in Hinesville.
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