Spring Clean Your Finances in 4 Simple Steps
Is this important? What records should I keep? When is that bill due? Where did I put that statement?
As you’re spring cleaning your apartment or office, you’re probably digging out (and swimming in) receipts, old bills, and statements. Which can make getting your financial life organized seem even more daunting than overhauling your closet.
While it may not happen overnight, getting your paper trail under control actually only takes a few steps. And, it’s a task with many rewards—hey, it’s much easier to manage your money once you know where everything is. Here are four easy fixes to help you get your finances swept into shape this spring—and for good.
1. File Your Forms
First things first: It’s filing time. Collect all of your existing financial documents and sort them using the following rule: 3, 7, Forever. Keep household bills, credit card statements, and receipts for minor purchases on hand for three years; cancelled checks, bank statements, and pay stubs for seven; and annual investment statements, birth certificates, marriage certificates, tax returns, insurance policies, and a copy of your will forever.
Once you have your documents organized, keep them that way—put forms in your files as they come in, rather than letting them pile up in the first place. Also make sure to go through your files once a year to toss out what you don’t need anymore (and consider investing in a shredder so you can destroy any sensitive documents).
2. Consolidate Your Accounts
The bank account you set up in high school, the 401(k) from your first job out of college, the investment account your parents set up for you with MCD and DIS so you could learn the rules of investing, that other 401(k) from your second job with the terrible boss—sound familiar? If you’re like most people, you likely have multiple accounts set up all over the place, which means multiple statements and multiple sets of fees.
Make life easier for yourself and consolidate these accounts in one place: Roll any old 401(k)s into one IRA and combine your checking accounts together. Not only will this make things easier on you (less statements in the mail each month, only one company to call when you need a statement or have a question), but it may even lower your annual fees.
3. Go Green
Once you’ve filed and consolidated, minimize the amount of paper that comes your way in the first place. Almost every bank or investment company has online access and e-delivery available for its customers, so if you haven’t signed up already, do so. Most companies will securely store all account documents for seven years, including statements, trade confirmations, tax documents, and general correspondence. Which means: More time for you to be out doing the things you love, not being buried by a mountain of paperwork you have to organize.
4. Streamline Due Dates
If your credit card due dates are all over the month, there’s a possibility you could miss a payment and be hit with a triple whammy—a late payment fee, interest charged, plus a hit to your credit rating. So, simplify, simplify, simplify. Take the guesswork out of the situation and have your bills set up so they are all on the same cycle. Either hop online and head to your account services, or call the number on the back of your card and a customer service rep should be able to help. You’ll be able to tackle all your bills on one day and pay them in one full swoop.
Managing your money isn’t always easy, but it’s a whole lot easier once everything’s organized—and these four easy steps will help you get there!
And now, onto the closet.
What are your go-to methods for keeping your finances on track? Do you have a system in place, or do you just wing it as you go?
For more in this series, check out: Personal Finance Week
Photo courtesy of Images_of_Money.
Niki comes to us from the financial world, but she’s an online girl at heart. After graduating from Cal, she spent a couple of years traveling and working (Ireland – NY – OC) before finally making it back to San Francisco to pursue a career in business and marketing. An avid fan of handwritten thank you notes, Niki also loves fresh flowers for any occasion, the sound of being underwater, and she firmly believes ketchup bottles do not belong on the breakfast table. When she’s not Musing, you can find her on her blog, wandering around the Ferry Building in San Francisco, or with her nose in a ridiculously addicting YA book.More from this Author