The flowers are in bloom, the birds are singing…it’s time to start cleaning up around the house. But while clearing out old clothes and dusting is a quick fix for easing your mind, why not take it one step further and clean up your finances? The benefits of this are twofold: recovery from winter spending season and preparation for summer vacation spending. Here are some of our tips for getting your finances organized this spring.
Choose the right financial professionals.
Whether you like it or not, your finances are a key part of your life. That’s why you have to make sure you have the right team of professionals and advisors looking out for you. When it comes to taxes, insurance, wealth management, banking, or estate planning, you should feel comfortable calling these individuals with your questions. For example, what can be shredded and what do I need to keep? Should I consolidate my 401(k) into an IRA? Get advice consistently and let them help you with the spring cleaning process. After all, the more organized you are, the easier their job will be
Take a moment to compile your credit card statements and grab two highlighters in different colors. Go through the list of payments and highlight essentials in one color and non-essentials in another color. This exercise will give you insight into how you’re spending your money that you simply can’t ignore. After you do this, you’ll be able to create a budget for the year informed by your actual spending habits. You can also take this opportunity for reflection to reexamine your cable and phone bills. Shop around for better deals or consider streaming services if you can picture your life without cable. Any small efforts to cut down on services or fees you don’t need will go a long way toward improving your financial situation.
Declutter: deal with your documents.
With the exception of tax returns, which you are encouraged to save for up to seven years, start compiling all the financial papers you have tucked away in a drawer. Shred everything you don’t need anymore. This will protect you from identity theft and help you remove unnecessary clutter. If you’re unsure if it’s important, scan the document to your computer and cloud-based storage for extra safety. You can also call your finance professionals for advice about whether you need to save it or shred it.
Now that you’re down to the documents you need to keep, file them away in appropriately named folders. Examples include Investment Management, Financial Planning, Taxes, Estate Planning, and Insurance. If your filing cabinet locks—even better! Now you can give your kitchen counter a much needed break from housing piles of bills and other financial documents.
Make a financial goals list for the year.
This may mean setting a goal to earn more money, save more money, or both. Studies have shown that the likelihood of achieving your goals increases when you write them down. After spring cleaning your finances, you’ll have a much clearer view about what you want to achieve and how you’ll be able to achieve it.
When you get your spring cleaning done this year, don’t neglect your finances. With a little organization and decluttering, you’ll be that much closer to reaching your financial goals faster.
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