5 Spring Cleaning Tips for Your Finances That You Need to Know

The beginning of spring cleaning conveniently coincides with the end of tax season. As we clean out our closets, garages and attics, most of us are also plowing through papers and files. A recent report shows that 51 percent of Americans who spring clean also pay special attention to their home office, and there are simple steps that you can take to join their ranks.

After a winter full of freezing temperatures, icy roads, and those pesky Monday blizzards, it is now time to look forward and to plan for the future. Here are 5 ways to get yourself financially-organized and tidied up for spring.

1. Throw Away Paper. Opt for less paper and clutter. Take some time to sort through your paperwork and files to get yourself organized. Shred the documents you no longer need; most bank and credit card statements are online anyway. Keep in mind that the federal government recommends that you only need to keep bank statements for one year, and tax documents can be discarded after seven years.

2. Clean Up Your Accounts. It is time to close unused credit card and bank accounts and to toss out dusty checks and statements. If you have multiple bank accounts open that you rarely use, consider closing some. And if you’ve been unhappy with your bank, now is a great time to switch. While you’re at it, check out your retirement accounts. Many people have at least one retirement account from an old employer sitting around, as well as various IRAs. Instead of dealing with multiple accounts, consider consolidating these accounts into one IRA account to streamline your retirement savings.

3. Review and reorganize your budget. As you receive your year-end investment and bank statements, do not simply file them away. Instead, take a close look and to make sure that your allocations are in line with your goals. Are you spending too much on frivolous things? Are you taking away from your future to finance the excesses of today? If you aren’t making the most out of your employer’s contributions to your retirement fund, it is worth taking a look at what you can cut out in order to ensure you will have a happy and financially healthy future.

4. Use Apps for Better Financial Organization. Modern computing tools and apps mean that it has never been easier to keep detailed records of where you are spending, and to categorize these records for easy consumption. You should find out how much you are spending on essentials like groceries, clothing, shelter, transportation, etc., and how much is being spent on discretionary spending like eating out, recreation, and hobbies. With detailed records, you might even find that there is plenty of room to cut down on what you thought was essential spending. Make sure to follow through by comparing your spending in the first months of this year with last year’s spending to see how your lifestyle changes are making a difference in your finances.

5. Review Your Rates. When you get your mortgage statements, take a look at your interest rates. With rates at historic lows, now may be a good time to refinance your mortgage. Also consider refinancing your 30-year mortgage into a 15-year mortgage. The payments may be higher—even with a lower rate—but you can potentially save tens of thousands of dollars in interest.

These are just some of the basic steps for reviewing your financial planning needs. It may seem daunting at first, but when you set aside just a few hours, you can easily take steps towards improving your financial health. You will even have time to move on with the rest of your spring cleaning.

For more information, call Scott M. Kahan,CFP® at Financial Asset Management Corp., 914-238-8900 or email skahan@famcorporation.com.

About Financial Asset Management Corporation (FAM)

Founded in 1986, Financial Asset Management Corporation (FAM) is a fee-only financial planning and wealth management firm providing personalized services to individuals, families and small businesses in New York City, Westchester County and the Tri-State area. FAM is committed to consistently serving its clients and providing the best services possible. FAM’s highest priority is to guide clients and inspire them to fulfill their lifetime goals. For more information, visit http://www.famcorporation.com/.