How to Clean Up Your Finances
September 17, 2020
This is a great time of year to clean up your finances and get organized. You will be in a better place to take action on your budget and other financial goals once your finances are in order. Here are some tips to get you started.
One way to organize your finances is to choose an e-Statement option with your financial institution for your monthly financial statements. Another good practice is to shred any financial paperwork you don’t need.
Create files to organize other documents, such as tax returns and year-end investment statements; and active deeds and policies (auto insurance and car deed of sale). For documents such as your marriage license, will, and passport, consider purchasing a locked, fireproof, waterproof safe to keep them from being damaged.
Another good idea is to update and consolidate all of your financial accounts, which can save you money. For example, moving funds from a previous 401(k) account to your current retirement account will help you keep better track of all your funds. Also, closing any financial accounts you don't use may save on fees.
This is a great time to take advantage of low interest rates, especially if you have a good credit score. You could potentially save hundreds or even thousands of dollars over your loan term. Contact your financial institution to discuss how refinancing your auto or mortgage loan – or both – could save you money.
Boost your savings
It’s important to have an emergency fund to cover unexpected expenses. Start by setting a goal to save a certain amount per month, such as $25, and then set up automatic transfers from your checking account to a savings account. It is recommended you have three to six months of your monthly expenses in an emergency savings account.
Review your budget
Once your finances are organized, review any life changes you have had since last year, such as a move, new baby, or job change. Then adjust your budget to reflect updated spending and saving amounts.
Take time to organize your finances by establishing files, consolidating accounts, refinancing loans, increasing savings, and updating your budget, and you will be on your way to achieving your financial goals.
Tags: Savings, Money Management, Tips and Tricks