“Spring Clean Your Finances”
Spring Cleaning is something that most of us do with our homes to make sure that everything is fresh and prepared for the summer. We put away our coats, wraps, winter hats, gloves, and boots. We exchange our heavier winter comforters for spring colors and lighter ones. Some of us change darker colored drapery for vibrant colors; our closets are carefully cleaned and organized, and we donate excess clothes and shoes.
We should be just as meticulous with our finances. Now is a great time to spring clean your finances. Avoid waiting until mid-year or the year’s fourth quarter to make adjustments. Give some important areas of your finances the attention needed today. I will be elaborating on this subject this week on my Facebook page with live streams to help you get everything in order, hopefully, so please follow along. According to Forbes Money (Ashford, 2016), these are areas that should be given special attention:
Take a quick video of your home. If your house burned to the ground, would you have records of your belongings for insurance replacement purposes? One of the quickest ways to do this is to walk around each room with a video camera or smartphone and get footage of what you own. Take close-ups of brand names and serial numbers for larger items. Do this annually and upload the file to a cloud-based storage service, such as Dropbox, so you can access it if something happens to your home.
Check your credit. Use annualcreditreport.com to pull down a free credit report from each of the three bureaus to make sure you know what’s in your file. You can also use CreditKarma.com to get a feel for your credit score, says Robert Wilson, a financial planner with Wilson Insight. If there are errors, notify the bureaus so they can correct them.
Review estate documents. You should review any estate plans you have, including wills and trusts, to ensure they’re up to date on both heirs and executors. “Be sure the personal representatives and trustees listed are healthy enough and willing to serve,” says Steven Weil, Ph.D., president of RMS Accounting in Fort Lauderdale, FL.
Update beneficiaries. Once a year, you should ensure all the beneficiaries and contingent beneficiaries on retirement accounts and insurance policies are the people you still want to name. “I can’t tell you how many times I’ve seen a beneficiary on a life insurance policy or on a 401(k) account be somebody the person no longer has contact with or someone who has passed away,” says Cooper Mitchell, an investment advisor representative with Dane Financial in Springfield, MO. “It’s great to have a plan to grow wealth, but you also need a plan to pass on wealth.”
Shred paperwork you no longer need. The IRS recommends keeping tax returns and supporting documents for seven years. “But keep some documents forever,” says Kevin Gallegos, vice president of Phoenix operations for the Freedom Financial Network. “These include birth, marriage, and death certificates, divorce decrees, wills, Social Security cards, and military discharge papers.” You should also keep vehicle titles, home loan documents, and insurance policies as long as they are valid.
Your comments are welcome and encouraged! How do you spring-clean your finances?
Christine Roebuck/CEO