April isn’t just about filing taxes—it’s also Financial Literacy Month, a perfect opportunity to reflect
on your financial habits, expand your knowledge, and take meaningful steps toward improving
your financial well-being. Whether building your first budget, preparing for retirement, or
navigating the complexities of paying for college, financial literacy is the foundation for making
confident, informed decisions.
And your financial team here at Trail Ridge Wealth Management is here to help!
Schedule a Meeting Today
It’s important to remember that financial literacy isn’t something you master once—it’s a lifelong journey of adapting, learning, and growing as your circumstances and goals evolve. Here are some practical steps you can take today to strengthen your financial foundation:
Lessons from Tax Season—Turning Insights into Action
Tax season may not be anyone’s favorite time of year, but it does have a way of sharpening our focus on finances and decisions over the past year. It’s also an opportunity to reflect and identify changes that could improve your financial situation—and potentially your tax outcomes—for the year ahead.
Reflect on Your Tax Return
As you gather your records to share with your tax professional, it's a good time to identify patterns in your income, expenses, and deductions. Determining how much is coming in vs. how much is going out is the first step in creating a realistic budget. Spotting overspending or missed opportunities may help you modify your behavior and adopt better financial habits that could benefit your financial health in the long term. It's also worth reviewing your tax withholdings to see if they align with your current situation.
Common Gaps in Record Keeping
If tax time is always a last-minute scramble for documents, receipts, and other paperwork, learn from this year’s experience and commit to being better prepared for next year. A good tax document organization system can help you track income, deductions, and expenses year-round. Being organized can make it easier to calculate taxes accurately, claim deductions, and make smart financial choices.1 For physical paperwork, consider setting up folders or binders for different types of documents. Think of separate folders for personal bank statements, medical records, and investment statements. Arrange papers in chronological order or by categories inside these folders so you can easily find them. Label folders clearly and keep them in a filing cabinet or a fireproof box.1
However, in today’s world, you may want to go digital. Many financial institutions send tax documents electronically. Download them and save them to a digital folder. For physical documents, scan them and save them to the same folder. Arrange these digital files in folders and sub-folders on your computer or an external hard drive—just like you would with paper copies.1
Trail Ridge Wealth Management is pleased to offer you the use of your own personal financial website, which includes a secure digital Vault for safe record-keeping. This tool helps you store and organize your financial documents so they are accessible when needed, and provides a platform to easily and securely share sensitive financial documents with your Trail Ridge team.
Using Your Tax Refunds
According to IRS data from February 2024, the average tax refund amount was $1,395 in 2024, down nearly 29% from $1,963 the previous year.2
Of course, this is just an average, and your refund might be higher, lower, or non-existent if you owe the government money. If you receive a tax refund, here are a few ways you may want to put it to use:
- Build Your Emergency Fund
An emergency fund is one way to help manage unexpected expenses or layoffs. If you can't put
away three to six months of expenses in your savings with your regular paychecks, your tax refund
can be used to boost that number. - Pay Down High-Interest Debt
If you carry a balance on credit cards or other high-interest debt, consider paying down that
balance and free up your budget. - Tackle Maintenance Costs You’ve Been Postponing
Have you postponed car issues, appliance problems, or home repairs because of the costs?
Consider using extra cash from a refund to address these needs before they get worse and
potentially more expensive to fix later. - Better Yourself
You could use your tax refund to invest in yourself. Ideas could include taking a course at a local
college, getting a certification that could improve your job prospects, or finally starting that side
hustle you’ve been thinking about. - Invest Extra Cash
If you receive a larger refund, you may want to work with your financial professional to invest that
money.
Spring Clean Your Financial House
Financial wellness includes taking steps to declutter and organize your financial life. Many tools and resources make spring cleaning your financial house more manageable and efficient. Here are a few areas you can focus on:
Review Your Investment Strategy
Spring may also be a good time to speak with your financial professional about your current financial strategy. Working with your professional, you can determine if your investment portfolio needs to be rebalanced due to market gains or losses, whether changes to your goals or timeframes require tweaks to your strategy, or whether your overall financial situation has changed.
Schedule a Meeting with your Trail Ridge Team Today.
Fraud Protection Checkup
Spring is a good time to review the security of your identity and personal data, especially when using online accounts. A 2024 Federal Trade Commission (FTC) study showed that consumers reported losing more than $10 billion to fraud in 2023, marking the first time that fraud losses have reached that benchmark. This statistic marks a 14% increase over reported losses in 2022.3
Here are a few things you can do to enhance your financial security:
- Regularly monitor your financial accounts for suspicious activity, especially at tax time
- You can and should obtain a free copy of your credit report once per year
- Enable Multi-Factor Authentication
- Especially for services like your email, bank, and credit accounts
- Go Green with Digital Account Statements
- If you prefer physical copies, shred them rather than throwing them in the trash
Use a Password Manager
You can attempt to enhance your online security to protect sensitive information by using strong, unique passwords and regularly changing them. You should consider creating different passwords for
various accounts and avoid using information related to your identity, such as your pet’s name, your birthday, your initials, or parts of your name.4
Luckily, technology can you help you with this. Trail Ridgeis happy to offer our clients 1-year free access to:
Account Consolidation
Streamlining your financial life can include combining old or forgotten retirement accounts. Accounting for all your assets and having them in one place can help you and your financial professional develop more comprehensive investment and retirement income strategies.
Surprisingly, losing track of an old retirement account happens more often than you might think. As of May 2023, there were over 29 million "left-behind" or "forgotten" retirement accounts in the U.S., holding nearly $1.65 trillion in assets.5 Whether or not the balance of a forgotten account is large, this can be “found money.”
You can use the Department of Labor's Lost and Found Database to search for lost retirement accounts.
Beneficiary and Insurance Checkup
Use this annual opportunity to update your beneficiaries on insurance policies and retirement accounts. Not reviewing your beneficiaries on retirement accounts and other key contracts can result in unintended consequences. Typically, a beneficiary designation overrides any instructions detailed in a will. For example, you may leave everything to your spouse in your will. If your children are named beneficiaries on your retirement account at your passing, the money in that account could be transferred to your children instead of your spouse.6
Beneficiaries listed on an account opened long ago may not reflect your current circumstances and may no longer match your estate goals. This can be true in the case of divorce, the birth of a child, or the death of a beneficiary. So, including a review as part of your spring cleaning is a good idea.
Building Better Money Habits – Small Changes, Big Impact
When getting your financial house in order, even minor changes, consistently applied over time, can have an impact. Some ideas can be implemented independently, while a financial professional might be able to help with others.
Simplify Spending Tracking or Creating a Budget
Creating a budget and sticking to it is an important step in taking control of your finances. You can determine your cash flow, track expenditures, and account for assets and liabilities on an old-school spreadsheet or with digital tools.
If you want to go high-tech, your personal financial website is a one-stop shop for personal money management.
- Consolidate your financial information in one place for a holistic, high-level view of your financial situation
- Track and monitor your spending habits
- Create a budget
- Review your investments
- Make a long-term financial plan
- Safely store and share your sensitive financial documents
Automate Savings and Investing
Many people struggle to prioritize saving and building an emergency fund, but automation can help. Setting and forgetting your savings strategy can help as you tuck away a bit of your monthly income without remembering to make transfers. Not only does automation remove the mental barrier of having to remove money from one account to another, but you may also be more likely to stick to the pattern when you don’t have to remember to make a transfer.
Just like with savings, automating investing can make it easy and efficient to build a nest egg for retirement, put assets aside to cover education costs, or tackle other goals. Working with your financial professional, you can determine what works best for you, your timeframe, and your risk tolerance.7 Investors should evaluate their financial ability to continue making purchases through periods of declining and rising prices.
Family Money Talks – Building Financial Confidence at Home
Financial literacy is something that the entire family can benefit from. While talking about money can be uncomfortable for some, ignoring the family's financial issues will not make them go away.
The more you normalize financial conversations, the easier it is for you to talk about problems if they arise or eventual estate strategy discussions as you get older.
If you have children, you might want to get them involved in age-appropriate family discussions about financial literacy and money matters.
- Younger children can be introduced to financial concepts like earning an allowance through
chores, saving money to pay for things they want, and learning that money has value. - Teenagers can be taught the importance of working a part-time job to earn money while learning
about budgeting, credit basics, and the deferred gratification of saving for larger goals. - It might be appropriate to include adult children in estate strategy discussions and know where
your important documents are kept and your healthcare directives.
Even if you don't have children, tension can build when partners do not manage finances well, struggle to talk about money, or aren’t honest about spending. In some cases, ongoing tension leads to separation or divorce. A 2024 Fidelity Couples and Money Survey found that 45% of partners said they argue about money sometimes, and one in four couples say money is their top relationship challenge.8
Spring can be a good time for couples to discuss finances. When you discuss money more consistently, your conversations will get easier and feel more normal. Couples may also want to meet with an objective third-party financial professional who can facilitate the conversation and help develop a comprehensive financial strategy.
Working with Your Trail Ridge Wealth Management Team
Taking control of your finances can feel overwhelming, but small, consistent steps can make a big difference over time. Whether you’re organizing your financial documents, learning more about budgeting, preparing for major life events, or reviewing your long-term financial goals, each action strengthens your financial foundation and can build your confidence.
When you’re ready to take the next step, we’re here to guide you. From helping you create a comprehensive financial strategy to helping you leverage tools like secure digital vaults or educational resources, we’re committed to empowering you with the knowledge and strategies you need to pursue your goals. Financial literacy isn’t just about knowledge—it’s about having the proper support to make informed decisions for your financial future.
Let us help you turn your goals into a strategy! We are here for you!
Schedule a Meeting with Your Trail Ridge Team Today
Sources:
1. DataSnipper, August 25, 2023
https://www.datasnipper.com/resources/how-to-organize-tax-documents
2. IRS, February 2, 2024
https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-feb-2-2024
3. Federal Trade Commission, February 9, 2024
https://www.ftc.gov/news-events/news/press-releases/2024/02/nationwide-fraud-losses-top-10-billion-2023-ftc-step
s-efforts-protect-public
4. U.S. News & World Report, May 4, 2024
https://www.usnews.com/360-reviews/privacy/identity-theft-protection/10-ways-to-prevent-identity-theft
5. Capitalize, June 23, 2023. Once you reach age 73, you must begin taking required minimum distributions (RMDs) from
your 401(k) or any other defined contribution plan in most circumstances. Withdrawals from your 401(k) or any other
defined contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal
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income tax penalty.
https://www.hicapitalize.com/resources/the-true-cost-of-forgotten-401ks/
6. Trust&Will, December 2024
https://trustandwill.com/learn/beneficiary-designation-vs-will
7. Forbes, July 30, 2024
https://www.forbes.com/advisor/investing/dollar-cost-averaging/
8. Yahoo Finance, May 26, 2024
https://finance.yahoo.com/news/7-money-issues-lead-divorce-150003476.html?guccounter=1&guce_referrer=aHR0c
HM6Ly93d3cuYmluZy5jb20v&guce_referrer_sig=AQAAAD-gSiSE0XJ4TWsBMPswXbQ5dvIqZd65QlTQ7IXt-m1XzrWMsaa_1
MJICs9I8f3JbANzT4n7V2tWEAP1dx0qWGul0i5wMwqthwwMKxqL0N6wGUqqXW4I_mvPqqTUNIbzHK15PB-7gsKpc3nXnYuSeR
_Jup4_lqpxahaoyv7L-nWM