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Its Time to Spring Clean Your Finances

Spring is here, and it’s time to clean up our finances! Of course, one crucial aspect of cleaning your finances involves getting organized. Huffington Post

It’s time to clean up your financial clutter.  Financial clutter isn’t as noticeable as a garage full of junk but a numerous amount of bank accounts, credit cards and retirement accounts can cause you major troubles, not to mention they can eat away at your assets.

There’s good news however, financial clutter can be cleaned up and the work to get there is well worth the effort.  It takes some work to accomplish, but if you just let the problem go unchecked, it will just add to the mess.  Here are a few ways to get your financial clutter under control.

So, you can’t clean up the mess if you don’t know where it is.  That’s why the first thing to do is to make a list of all your financial accounts, debts, credit cards and other assets.  This list will show you what you own, who you owe and help figure out what you can get rid of.

Look over your list.  Is there anything that can be consolidated, credit cards perhaps? Do you have multiple accounts that are redundant and can be eliminated?  You might even come across an account you didn’t even realize you had.

Clean up your bank accounts.  How many bank accounts do you have?  Most people only need two bank accounts at the most.  Maybe one at a national or regional bank and another at a regional bank or credit union.  The more accounts you have, the more paperwork, fees, cards or checks and the exposure to identity theft you have.  Do a little research to see who has the better accounts.  Who has free checking, doesn’t charge ATM fees, offers online banking or whatever is important to you.  …stop any direct deposits or payments from these accounts and close them.

Get rid of credit cards.  It’s my suggestion to keep only one credit card.  Pick the one that makes sense.  Choose to keep the card that has the fewer fees and lowest interest rate.  Pay more than the minimum on the others and pay them off as soon as possible.  Getting rid of these other credit cards will free you up from paperwork, advertising, identity theft and the most importantly, it will rid you of the temptation of over spending.  Make sure you tell the credit card companies to close your accounts.  You will likely have to check often to make sure they in fact close the account.

Roll over those 401(k)s.  If you change jobs often, or used to, it is possible to have left a virtual trail of retirement accounts behind.  Make sure you transfer all of your 401(k)s to your new employer’s plan as soon as possible.  If this isn’t an option with your new employer, roll them into an IRA.  Make sure when you leave a job you take all of your stuff with you, including your retirement accounts.

Get rid of those old statements.  Most financial institutions offer online statements and most of us make our payments online.  Stop getting paper statements if you still do.  Now go buy yourself a good paper shredder, gather up all of those old statements you have been filing away, pour yourself an adult beverage and start feeding that new shredder.  Shred all of those old paper statements.  If you have accounts that don’t offer online statements, file away those paper statements you receive in an organized manner and then once every couple of years go through them and shred the old.

It seems that when we have multiple accounts, we are more likely to look at those accounts as various financial reservoirs that we can dip into to make purchases whenever the urge strikes.  If you want any chance of getting you finances under control and be in the position of saving more, it is important to put your earnings into one single, liquid account.

The money you make doesn’t come easy, don’t lose any of it especially to clutter.

…Be sure to check out the companion to this article “Financial Clutter, What to Keep and What to Get Rid of”

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