Spring has sprung and with the change in the weather comes the ritual of Spring cleaning our homes. But what about your finances? If you’re cleaning and organizing your home, it’s also a good idea to review and organize your finances.
That way you can know where you stand financially, and maybe even save some money in the process.
Ready to get started? Here are just a few aspects of your finances that could probably benefit from a spring cleaning.
Your Records
Take the time to go through your financial records and get them organized. If you don’t have a budgeting system in place, create one.
Buried in bank statements and financial clutter? Go paperless. You can probably access your financial statements through your bank, and you can use a document scanner to scan your financial documents to be saved for future use. You may even be able to download one from your phone.
One word of warning. The IRS recommends that you hold onto your tax returns for at least five to seven years before discarding. So don’t throw anything away unless you’re sure you don’t need it anymore.
Your Bank Accounts
Do you have savings and checking accounts that you no longer use? Even inactive accounts can incur fees and additional costs. Take a survey of your accounts, and determine if you can transfer balances to consolidate your finances into fewer easy to manage accounts.
This makes it less likely that you’ll get charged unnecessary fees, and you’ll know where your money is when you need it.
Your Credit Cards
Have you checked your credit score lately? Sites like CreditKarma.com allow you to check your credit score for free with no impact.
Take the time to review the APR and balances on your credit cards. If you have multiple cards with higher interest rates, it may be to your advantage to consolidate balances.
Don’t forget to review your monthly statements. One great idea is to take three different colored highlighters and go through your statement. Have one color for necessities (like utilities), one for conveniences (like Netflix or a necessary purchase) and a third for luxury or random items. You may find that you’re surprised about how many purchases fall into the third category.
Also, if you see recurring charges that you don’t recognize, you may have signed up for a service or membership that you’re not using. If you’re not using it, don’t pay for it.
Your Home Mortgage
If you can, try to set aside a little extra money each month and use it to pay down your mortgage. Everything you pay goes to lower the principal which helps you pay it off faster.
Your Insurance
Have you reviewed your insurance policies lately? Take the time to see if you have the coverage you need.
For example, depending on your situation, you might be able to shop around to get a competitive rate on your auto insurance. You may also be able to get a discount by bundling home and auto insurance through the same carrier.
If you’ve done significant renovations or additions to your home and haven’t revised your insurance policy, make sure those improvements are reflected in your policy. The cost to adjust your policy is minimal, but in the event that something happens to your home, it could add hundreds of thousands of dollars to your payout.
Your Retirement Accounts
If you’ve changed jobs, there’s a good chance that you have multiple 401(k)s, IRAs and other retirement accounts. Depending on your circumstances it might make sense to roll them over into a self-directed IRA. If you’re not sure where to start, talk with a financial advisor.
Need help with getting organized and spring cleaning your finances? Schedule a free counseling session today or call us at 800-920-2262.
