We all know that huge sigh of relief that comes after filing taxes, but what happens next? Although it may be tempting to close the books and move on, the period immediately after tax season is actually a great time to refocus on your financial goals. Now that tax season is behind you, here are the top priorities you should consider:
1. Review and Adjust Your Budget
Now that you have a clear picture of your financial situation, it’s a good time to revisit your budget. Are there areas where you may have overspent or opportunities to save more? If you received a tax refund, consider applying it toward high-interest debt or your emergency fund instead of splurging.
2. Replenish Your Emergency Fund
If you dipped into your emergency fund for unexpected expenses or tax payments, prioritize building it back up. Financial experts recommend having at least three to six months’ worth of living expenses set aside. You can use automatic transfers to rebuild your fund steadily.
3. Review Your Retirement Contributions
Post-tax season is the perfect time to evaluate your retirement savings. If you’re not maximizing your contributions to accounts such as a 401(k) or IRA, think about increasing your monthly contributions. Every small increase can lead to significant growth over time.
4. Plan for Next Year’s Taxes
It may seem early, but planning ahead can save you money and stress next year. Consider adjusting your withholdings if you ended up with a large tax bill or an excessive refund. Work with your financial advisor to ensure your estimated payments are on track.
5. Review Your Investment Strategy
Spring is a good time to rebalance your investment portfolio. Assess your current holdings, evaluate performance, and make adjustments as needed to align with your long-term financial goals.
6. Check Your Credit Report
Your credit report is an important component of your financial health. After tax season, take a moment to request your free annual credit reports from all three major credit bureaus. Look for discrepancies and address any errors that could impact your credit score.
Tax season is more than just a deadline—it’s an opportunity to realign your financial strategy. By taking proactive steps now, you can position yourself for stronger financial health throughout the year.
For more financial planning tips and personalized guidance, visit with one of the experts at Hayes & Associates.
