April 18, 2014

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Spring Cleaning For Your Finances

For many homeowners, spring means sprucing up the yard, planting a garden, or maybe organizing your closets. Why not add your finances to your spring cleaning to do list?

The first step is figuring out what to keep and what to throw out. If you’re like me the idea of throwing away financial papers might make you nervous. The good news is almost all printers sold today come with a scan feature so you can easily scan and save these types of documents.

Another great tool is a shredder. Shredding documents will help keep your personal information safe from identity thieves who troll dumpsters and landfills. Make it a habit to shred anything with sensitive information (SS number, account numbers, etc.) before you throw it away. Shredding can actually be fun as it makes you feel like a character on Homeland.

Ready to spring into cleaning up your finances?

Tax returns. The IRS recommends saving your federal tax returns from the past three years only; anything older can be discarded. The caveat would be for self-employed filers or for anyone who is being audited by the IRS. Check here for more details.

Bank statements. You only need to save these for a year, but hang onto the pages that include copies of cancelled checks. Some banks no longer return them.

Bills. Ahh bills, lovely bills. Oh wait. I hate bills. If you haven’t gone paperless yet, monthly statements and utility bills can take up a lot of time and space in your home. Once you’ve checked to make sure there are no inaccuracies and that you’ve paid the bill you can shred and discard this type of paperwork.

W-2 forms and paychecks. Paychecks over a year old can be tossed. Because you just did your taxes I’m assuming you reconciled them with your W-2 form and your 401(k) plan contributions. It’s a good idea to keep this years’ documents in a folder marked 2014 Tax Return so you’ll get a jump on your tax prep for next year.

Review your monthly budget. Now is a great time to review your spending habits from the first few months of 2014. If you’ve been sticking to your budget, give yourself a pat on the back. If you’ve been managing your spending so well that you have money left over each month you can put it into your 401(k) or a high-interest savings account.

Go paperless. Take advantage of paperless bills and statements for your credit card and bank accounts. By going paperless you’ll spend less time opening mail and filing. And your countertops and dining room table will be less likely to get cluttered. You still need to make a point of monitoring your online statements to make sure you aren’t charged erroneously or hit with fees you didn’t agree to. Monitoring your credit report is key to keeping your financial records clean and looking like a winner in the eyes of future creditors.

To make this easier why not sign up for IdentityForce’s UltraSecure+Credit and get the peace of mind that daily credit report monitoring can give you? It helps guard against identity theft and protects credit scores. You’ll be notified instantly about suspicious activity and get help with any necessary identity restoration.

Lastly, make sure you dedicate time on your calendar for your financial spring cleaning, but don’t overwhelm yourself with an eight-hour blitz of organizing. Try booking 30-minute blocks of time for each stage of the project. Be realistic about what you can accomplish in the time you allocate. Keep a list of the tasks and check them off as you go––it will make you feel good about what you’ve accomplished.

Our next post will have some tips on how to spring clean your digital devices, so check back soon.

Image courtesy of Flickr user Dvortygirl.

Melanie Medina

Sr. Director of Digital Marketing at IdentityForce
Melanie is a native of Bolivia who has lived in Boston for over 10 years. She likes to make time to travel, jog, read, and play backgammon. Fueled by copious amounts of coffee, Melanie stays on top of her to-do list while also keeping abreast of identity theft issues. Serious data breaches are happening all the time in the U.S. and Melanie loves being part of a solution that brings peace of mind to families across the country.

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