Spring Clean Your Finances
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We have an interesting post on Your Finances and Getting Them In Order! Practical advice you can use TODAY…before you read this make sure you take three deep breaths: Clear your mind….
INHALE……….EXHALE
INHALE……….EXHALE
INHALE……….EXHALE (How do your feel?) I feel great!
Are you ready for Spring? Yes, the warm weather and a clutter free, organized, financial plan….Getting your finances under control might seem daunting, but doing the following seven steps NOW sets you up for financial success for the rest of the YEAR. Ready for the steps? Here we go…
Step 1 – TOSS THE SHOE BOX.
You need to clear out the clutter, as it is an investment in time that is well worth it because once you have gotten rid of everything you don’t need, you have access to all of the papers you need…make sense??? Yes it does!
But do not be too quick to toss all of your financial documents, as the IRS requires you to keep your tax returns, including any paperwork needed to prove your deductions, for at least seven years. Check this out, invest in a filing cabinet and LABEL the files for easy access. Or for those of you that are tech savvy, scan your documents and file them electronically…be sure to Back Up YOUR Files…
Now, for the documents you want to toss, SHRED them! Shred anything with your name, address, or account numbers to protect against identity theft. If you do not want to invest in a shredder, no problem and alternative would be to take your documents to an office supply store as they will shred your papers for a small fee.
Step 2 – INVEST IN DOCUMENT PROTECTION.
Where are your important papers stored? Some papers are too important to store in a filing cabinet. Storing your important papers such as property deeds, insurance policies, stock and bond certificates, account inventories, passports and personal valuables in a safe deposit box. Storing valuable documents in your home, even in a safe, can be less secure if someone breaks into your home. The other advantage of a safe deposit box is that it is separate from your home in the event there is a fire or flood. The cost to rent a safe deposit box depends on its size (a small investment for peace of mind) depending on the type of relationship you have with your bank, the fee may be FREE so inquire.
Step 3 – CHECK YOUR CREDIT REPORT.
Question for you??? Do you know what is on your credit report??? You are entitled to a free credit report from each of the three credit bureaus – Experiean, TransUnion, and Equifax, once every 12 months through annualcreditreport.com. It is HIGHLY suggested you peer your credit report carefully to make sure everything is correct and there are NO signs of fraud or identity theft. Immediately address issues, such as reporting inaccuracies or clearing up late payments, to help improve your credit score. Another important determinant of credit score is how much you owe compared with the amount if credit you have available. When you close credit card accounts and lose the available credit on those cards, it can cause a temporary drop in your credit score because your balances represent a higher percentage of your available credit limit. Close credit card accounts only if you are NOT planning to apply for any new credit..that includes a mortgage or car loan, in the next six months.
Step 4 – ORGANIZE YOUR ACCOUNTS.
Do you have multiple bank accounts, investment accounts, and credit cards? Do you have a headache trying to manage them all? If your answer is no, you are very fortunate. However, many of us see this as stressful. Attempting to manage multiple bank accounts, investment accounts and credit cards is one of the biggest sources of financial disorganization, as when you have multiple accounts, you tend to lose track.
Rolling over multiple 401(k) and IRA accounts into a single retirement savings account makes it easier to monitor the performance of your portfolio and will save you money by cutting down on the fees. Now, use the same logic for your bank accounts, you may be incurring higher costs for having several accounts with lower balances spread across multiple banks. Consolidating into one checking and one savings account could slash your banking fees.
Step 5 – EMBRACE TECHNOLOGY.
One of the easiest ways to organize your finances is through online banking and automatic bill payments. Authorizing automatic payments for bills that are reoccurring monthly, such as: mortgage payments, student loans, auto loans, even health insurance premiums will assist you in gaining financial control and you are most likely not to miss a payment deadline. Something to share…It took me sometime to get on board with this… glad I did…Another suggestion to stay organized – streamline your financial life by downloading new smartphone apps.
Step 6 – EVALUATE YOUR ESTATE PLANS.
Do you have an Estate Plan? A comprehensive estate plan includes a revocable trust, a will and a durable power of attorney. Without estate planning, guess who??? The government will decide how your assets are split up…Don’t you think the government has enough control??? Well make sure the government does not have control over your assets…In other words, taking the steps to create an estate plan is ESSENTIAL. There are no standard fees for estate planning. Some attorneys will charge a flat fee for preparing the documents, and others charge by the hour. Whichever way you go…consider this an investment in protecting your assets.
Now that you have the documents established, it is essential to review them every two years or anytime there is a change in your assets or family circumstances, including marriage, divorce or death. Your estate plan should reflect your current circumstances. Keep it up to date!
Step 7 – HIRE A PRO.
Are you overwhelmed, yet? If so, you may need to hire a professional to assist you in getting your finances in order. Working with a financial planner can take the guesswork out of managing your money and help you make sound financial decisions. Talk to at least three planners to find the right fit. Having someone else (a professional) to talk to about financial matters can ease your mind and reduce stress!
“A Stable Mind Is The Key To Total Wellness”
Be Blessed, Stay Healthy!
See ya!
Dr. Joy
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