Spring Cleaning Your Finances

May 8, 2015

While you’re busy with those household spring cleaning tasks, why not take some time to brush out the dust and cobwebs from your finances too? No matter a person’s wealth, we should all continue to consider new ways to get a better handle on our money and gain control of records and information that help protect our finances. By trying some of the following practices, you can keep up with your current financial situation and maybe even save money over time with good record keeping.

Because we are all human and tend at times to lose track of important documents and statements, putting a good filing system in place is an important step to getting your finances in order. When looking through all of your financial documents, first consider which ones can be tossed and which ones are necessary for tax purposes or long-term financial records. You’ll immediately have less clutter and be aware of what is actually in your possession. Although today many people prefer to save everything digitally, if you are a paper person, keep a central drawer to organize all your financial documents. Folder names might have broad categories with the tax filing year so that all of the documents from that time frame are kept together. By keeping important financial documents in one place you can better prepare for tax season too and maybe even find a deduction or two you missed

Another way to keep things in a known order is to put all statements for one year into a folder with the newest date on top; when looking for the specific document you won’t be shuffling through a year’s worth of papers. For digital files, consider naming folders starting with that year, then followed by the two digit month and ending with the name of the institution or document. All files that are kept electronically should always be backed up in case of a hard drive meltdown or any accidental deletion. There are plenty of services that will sync your devices and keep files in the cloud for a fee which will save you from a future hassle

Many Americans have more than one retirement account set up due to leaving a former employer, and others have multiple taxable accounts as well. By seeking assistance from a financial advisor and consolidating these accounts, asset tracking will be made much easier and may result in less fees. While working with a financial professional, review beneficiary designations on your retirement accounts and insurance policies as well; by regularly reviewing these accounts you’ll have a better understanding of where everything stands.

Spring cleaning your finances doesn’t have to be a long drawn out process, but by following a couple of the steps listed above, you’ll have a better understanding of your finances and it will be even easier to review them in the future. It takes some effort to organize your papers and consolidate accounts that have gotten away from you, but you are improving your own well-being as well as that of those you love.