De-cluttering and organizing are necessary parts of life — especially if you want to eliminate stress and maximize productivity. So, what should you declutter? It could be anything from your home to your file drawers to yes, even your finances.
How to declutter your finances? Here are 6 steps you should regularly take to make sure your finances are set up for optimum success.
1. Pay yourself first.
One of the best ways to regularly save money is to take advantage of automatic contributions. When you receive your paycheck, set up automatic payments so a portion of it goes into your savings, investments, and/or retirement accounts. This is a small budget adjustment, but it can be a big change in building your wealth over time.
Next, review your budget to see if you have extra money that you could put towards these automatic payments. Maybe try packing a lunch or visiting your local coffee shop two times a week instead of five. Every little bit counts.
2. Review your monthly statements.
So, you’ve automated your payments. Great! But this doesn’t mean that you don’t have to regularly check on them.
Get in the habit of reviewing your monthly bank and credit card statements. Then, decide what’s important — and what’s not. Make a list of all your recurring charges and subscriptions and consider canceling anything you’re not using enough to justify the expense.
Also, review the terms and conditions of your accounts and be sure you understand what fees, if any, your financial institutions might be charging you and what benefits you might be overlooking.
3. Shop around.
Do those fees seem like they’re too high? Has your cable bundle recently shot up? Or maybe you aren’t getting near your data cap on your cell phone services?
Whatever the situation may be, it’s a good idea to look for better deals. Do a little comparison shopping, and switch services if you find a way to save money every month.
4. Check your credit report and score.
We’ve all heard that checking your credit will automatically lower your score. This simply isn’t true. Federal law requires credit reporting companies to give you an annual credit report, if you ask for it. AnnualCreditReport.com lets you check your credit score at least once per year to make sure that no one has opened unauthorized accounts in your name.
Keep an eye out for major fluctuations in your score, which could be a sign of fraud. Regularly checking your report and score will help limit surprises if you’re preparing for a big purchase in the near future.
5. Scan and shred.
We’re in the age of digitization. If you haven’t yet, now is the time to move your financial records from paper to computer. This can save space and simplify tax season.
You can start by simply taking pictures and uploading those images into organized folders on your computer. There are also many apps and online services that help you seamlessly transition your filing cabinet to a cloud-backed folder. Once everything is backed up, you can shred any documents that are older than three years.
Review your retirement plan.
How have your short-term and long-term financial goals changed in the last year? Are you making a career change? Maybe you have a baby on the way? Or a child heading to college? No matter what the situation is, it’s always a good idea to regularly review your retirement plan. Things change, which means your plan may need to change as well.
We’d recommend adjusting your investment strategies to align with your goals, age, and risk tolerance. If you’d like some guidance, we’d be happy to help. Contact our office today.