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Spring Clean Your Finances

Spring cleaning was an annual event at my house when I was a kid. The whole family had to dedicate “as much time as it took” on a Saturday to clean the house, top to bottom. I hated the process but I have to admit, it gave me such a feeling of freshness and renewal. That spring tradition has been lost for a lot of us, but I think it is worth resurrecting for our financial houses.
Taxes have been filed which is a good trigger for gathering our financial paperwork from the prior year and getting it stored in the archives. Here are some ideas for some spring cleaning:
• Organize all of your tax return receipts with your tax return. Get an oversized envelope, label it 2014 taxes and store it with at least the prior 6 years of returns.
• Go through any old statements that you have accumulated through the year. If you want to keep copies, considering scanning everything to a thumb drive and storing it with your tax return or put them all in an oversized envelope, label it, and store somewhere out of the way.
• For those old bills, statements, and notifications that you don’t need, be sure to shred them. My policy is to shred every piece of paper that has my name on it.
• Look through all of your electronic files and delete those that are no longer relevant. For everything else, create a backup copy, slip it into an envelope, label it, and store with your tax return. That is an easy, year-by-year way to store backup copies.
• Set a calendar reminder to back-up your computer at least once a month. I use an external drive so that it is big and easy to find versus a small thumb drive. Regardless, store it in a safe place so that all of data doesn’t find its way to school as part of your child’s history project.
• Set up your tax files for 2015. My firm created a really nice expandable file with labeled tabs for income, investments, charity, business, etc. but you can use any filing system that works for you. The important thing is to keep all of those receipts organized in a way that is easy to use and will make preparing next year’s return a snap.
• Make sure that you reconcile your checking and savings accounts to the bank at least every couple of months. I do find things that I missed even with my Quicken download process so take the time to clean up your accounts and make sure you know where you are.
• What else in your financial house is a bit messy? Make a plan to do some spring cleaning in that area as well.
Cleaning up, getting organized, and managing your financial house will give you a sense of accomplishment and control. It doesn’t take that much time – even spending 5 or 10 minutes a day will move you forward. Once it is done, you will be glad you did it.

Until next week, here’s to your financial success!