Your Spring Cleaning Isn’t Finished Until You Do These Things

Spring cleaning—it’s a time-honored ritual marking a transition from the dreary winter to the care-free summer months full of vacations, picnics, family reunions and all the leisure activities harsh winters do not permit.

Chances are your spring cleaning is already in the rear view mirror … but maybe not!

What About Your Financial Spring Cleaning?

Getting your financial house in order is equally important. However, don’t let a cleaning frenzy deprive you of important documents you might need in the future. Here are a few points to keep in mind as you wade through that filing cabinet.

  • Keep tax related documents a minimum of seven years. My colleague here at YFS, Jim Gibson, has an excellent article on the topic. I urge you to read it for additional details.
  • There is no need to retain bank statements, bills and pay stubs for longer than one year unless tax related (see above).

Use this opportunity to see where you can go “paperless.”

    • Most credit cards offer online statements as an alternative to receiving your statement in the mail. This can save you clutter, and is a safer alternative to having it sit in a mailbox waiting to be stolen. If you receive your bank statements online and by mail, consider stopping the hard copy version.

    • Pay stubs are handy to have, but I recommend retaining only the previous two periods and trashing the remainder. (Shred please!)

    •  While we are on the subject of “paperless” … we all have those forever documents, like birth certificates, discharge papers, social security cards and a host of others that we will never discard. Consider scanning those and storing them on a CD, or memory stick, then keep the originals in your safety deposit box. This gives you routine access to the back-up and protects your originals in a disaster scenario.

TIP: If you haven’t invested in a shredder, many office supply stores offer the service for a small fee. Make certain you supervise the shredding!

Credit Report Review

No spring cleaning job is complete until you have reviewed your credit reports and satisfied yourself that the information they contain is accurate. This is also an opportunity for you to spot any tell-tale signs of identity theft and request correction or removal of any erroneous information. Who knows—you might get a bump in your credit score from this little housekeeping chore. Get your free reports at annualcreditreport.com.

Credit Card Rewards

These reward points and other perks aren’t forever you know. Take the time to review frequent flier miles, points and cash-back. If you don’t do this periodically, there is a good chance that you will lose out on points, miles or cash back, due to missed expiration dates or other restrictions.

Update that Budget

Preparing a budget is no small task. As a result, once the exercise has been accomplished, many of us tend to avoid making any changes. Unfortunately, what’s done is done, is not the right attitude to take with your budget. It is a living document and as surely as things change in your life, they also need to change in your budget.

Things such as:

1. Pay raises

2. Paid debts

3. New debts

4. Tuition fees

5. Insurance expenses

These are just a sampling of factors that can change over the course of a few months, not to mention a longer period. Your budget isn’t going to be of any value to you if it is not kept current.

Also, review your insurance policies including home, life, health and auto. Make sure you have the right level of coverage for your current needs. If you have too much, you could save some money! If you haven’t enough, make sure the increased expense is factored into your budget.

Lastly …

Take stock of your overall financial assets. If you haven’t gotten around to a will, living or otherwise, a quick review might be the motivation you need to get that handled. This is a particularly important milestone if you have children, are divorced, or divorced and remarried. Naturally, the larger your estate, the more critical the need is for this type of planning, but make no mistake, everyone should plan for his or her death or the possibility of becoming incapacitated.

What about You?

What are your thoughts on a financial spring cleaning? What have I overlooked? Is there anything you would recommend beyond what has been discussed here?

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  • We have done our financial spring cleaning… actually I am in the middle of it. We have gone paperless over the last few years and I neglected to get rid of unneeded paper in our file cabinets. So, I have been scanning and shredding now for a while!

    I can’t think of anything you’ve missed. The other thing we do is make a back up of all our financial info (every few months) and have it secured somewhere else safely.

  • […] probably taken care of the house by now, but have you done your financial spring cleaning? H.D. Carver from Your Finances Simplified gives some great tips to ensure you’re on point […]

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