Most people think of their over-stuffed garages and closets when they think of spring-cleaning, but just after tax season is the perfect time to re-evaluate and tidy up your finances.
Here are 8 steps for getting your finances in order:
- Evaluate your debt – How much do you owe, and what kind of interest rates are you dealing with? Speak with your mortgage lender and credit card company to see if they can lower your interest rates (it never hurts to ask). Decide what you want to start paying down or off first, and create a debt-reduction plan.
- Update your budget – If you’ve experienced any significant budget changes, like a job change or going from two incomes to one, take this time to re-evaluate your household financials. Look at how you’ve been spending and consider how you’d like to be spending. Once you have that figured out, you can see where you might want to cut back in order to put more into your savings.
- Reassess your insurance – Take a look at all of your insurance policies, including house, car, and life insurance, and evaluate your premiums, deductibles, and coverage levels. Make sure your life insurance beneficiaries are up-to-date and that your coverage is adequate. Life insurance not only covers lost income, but can also help cover childcare costs and the deceased’s student loan debt.
- Check your credit report – Individuals can receive 1 free credit report annually from each of the three credit bureaus. Order your free credit reports from annualcreditreport.com, so you can look for and correct any mistakes. A study by the Federal Trade Commission found that 5% of consumers have credit report errors causing negative effects on their finances. When a credit mistake lowers your score, it can raise your interest rates when you borrow, or prevent you from getting a credit card or taking out a mortgage.
- Organize Receipts – Whittle down your wallet by removing all of those old receipts. Scan them onto your computer, or into a free app like Shoeboxed, so you have digital records and are able to get rid of the paper copies.
- Make copies – Create and maintain files of all your bank and credit card statements for the past year, whether you receive paper or online copies. Online information may only be available for a limited time, and if you need to retrieve it at a later date, you may have to pay your institution a fee for copies.
- Throw stuff away – Experts recommend keeping any documents pertaining to your taxes for 7 years. The FDIC suggests keeping credit card and bank statements that aren’t associated with your taxes for one year. File what you need to keep and throw out the rest.
- Consolidate vital financial records – Document all your accounts and keep all your records organized and in one place. If anything were to happen to you, would your spouse or a loved one know where to look to find everything they need to take over in your absence? Organization is important and can provide you and your loved ones with peace of mind.
If you come across any questions about life insurance during your Spring-cleaning endeavors, our SelectQuote agents are here to help provide you with solutions.