With Tax Day fast approaching and spring weather drawing nearer, thoughts of spring cleaning may be on your mind. The spring cleaning tradition reaches back a long way, and you can apply it to the mess of files and financial records- paper and virtual- piled up in your life, as well as the clutter around your home.
In addition to sprucing up your home for the upcoming warm weather, it might be time to sit down and spruce up your finances. Here is a smart guide to giving your financial house a good cleaning:
Know how long to keep paperwork
Have you filed your taxes yet? Are you unsure which financial documents to keep and which to toss? We advise keeping all returns and documentation related to your filing for at least seven years. This will help you prepare future tax returns and make computations if you ever file an amended return.
Discard papers if you have stored electronic copies. And just for good measure contact your bank and other financial service companies to learn how long they retain copies of your records.
Decide what to shred or toss
After going through all the records you need to keep it’s important to decide what to shred. Some paper items including old newspapers and the instruction manuals for things you no longer own can be tossed into recycling. But don’t risk identity theft by throwing documents containing personal or sensitive information in the trash. Shred them instead. Such documents include:
- Utility bills
- Reconciled bank statements
- Canceled checks
As always, if you’re unsure about whether you should get rid of a document scan the document and make a copy before shredding it. Not interested in shredding years’ worth of documents at home? Join us for our upcoming Shred Day event, April, 18, 2018 from 3 to 5 p.m. at the Foguth Financial Group office.
Make some financial tweaks
Once you have your records in order you can focus on giving your finances a spring tune-up. Take a look at your current situation and future goals and consider: revamping your budget, tweaking your investments, ramping up retirement contributions and adjusting your withholding.
Bank accounts. Scrutinize your bank accounts and shop for new ones. If you have too many accounts close your inactive ones and consider consolidating them to eliminate the unnecessary spending of your hard-earned money on banking fees. Go paperless. Some banks offer incentives by switching to paperless billing.
Insurance. Renters and homeowners alike benefit from creating an inventory of possessions. And ensure you’re still getting the best rates for your car-, home- and life- insurance policies. Use the spring to shop around insurance companies and see where you can save.
Also, a good rule of thumb for documents supporting an insurance claim is to ask your home-, rental- or auto-insurance or agents which documents you should keep and for how long.
Credit. Utilize one of your three annual credit checks. Ensure all changes to your name are accurate and dispute any discrepancies.
Review your budget. Is your budget up to date? Have you incorporated any increases or decreases in your income? Take a close look at your budget to see if you need to make any modifications. Make sure you’re reporting expenses accurately and have made room for savings account contributions.
Set up automatic bill pay. Spring cleaning isn’t only about decluttering. It’s also about making things more efficient. Set up automatic bill pay and link it to your primary checking account. Automatic bill pay will eliminate the chance of missing a payment and paying those pesky late fees.
Investments and retirement savings. Meet with your financial professional for your annual review. Determine if you’re still on track to your retirement goal and update any beneficiaries. Always keep your future in the forefront of your financial planning.
Finally, after reviewing your money matters you can turn your attention back to sprucing up your house and enjoy the rest of your spring!
Do you have a spring cleaning ritual you can recommend for more security and less clutter? Share it in the comments below or on our Facebook page.