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Janice France-Pettit: Financial spring cleaning

Posted: May 14, 2014 2:00 a.m.
Updated: May 14, 2014 2:00 a.m.

 

Spring is here and many of us are busy cleaning out closets and dusting the cobwebs that may have accumulated during the winter. While you are taking on spring cleaning projects, consider taking a fresh look at your finances.

Revisit your budget
Review your household budget and look for areas where you might be spending more than you should, or budgeting more than you might need, and then adjust your budget accordingly. Use this time to revisit your short- and long-term goals for expenses, such as college, purchasing a home, or retirement, and make sure you are setting aside enough in savings. Look for ways to pay down debt and contribute more to savings and investments on a regular basis.

Automate
Talk to your banker about technology and services that your bank may offer to help simplify your finances. Take advantage of direct deposit, online banking, and automatic payments for recurring bills, and set up regular automatic transfers to savings, investment and retirement accounts.

Look for ways to cut expenses
If you carry a balance on your credit cards, call your credit card company and ask for a lower interest rate, or seek alternatives elsewhere. If you notice that mortgage rates have dropped two or more points than what you are paying, consider refinancing your home mortgage at a lower interest rate. Compare home and auto insurance plans and contact your insurance agent and ask if you can reduce your rate. Contact your utility company to inquire about possible ways to save on your bill. Consider adjusting your withholding so you get as much money as possible in your paycheck versus a large refund when you file taxes.

Review important financial documents and policies
Pull copies of your will and/or living trust, and other important documents and review them to make sure they are up to date. Review insurance policies to make sure you have adequate coverage and a designated beneficiary of your choosing.

Consolidate accounts
If you have multiple 401k accounts, consider rolling them into a single IRA account to allow for streamlined control of your investments and to help reduce the paperwork of multiple accounts. Reduce your monthly bills by consolidating debts or loans into as few accounts as possible, and simplify even more by bundling services such as cable, internet and phone.

Control the clutter
Set up a simple filing system, and use it consistently. Assign folders, binders, or other receptacles to gather pending bills, statements, receipts and important financial documents, and store them in a safe place. Shred unnecessary paper, such as old sales receipts that have no tax purpose, or utility bills that can be accessed online. Consider creating digital files by scanning documents and filing them on your computer, but be sure to have that information backed up on a CD, flash drive or back up service. Inquire about paperless billing options to reduce the amount of paper waste and clutter.

Update your calendar
Set up a calendar to remind you when bills are due, policies are up for renewal, tax deadlines and other important financial dates to avoid late fees and penalties. Don’t forget to include reminders for things like year-end charitable contributions, and regular meetings with your banker or investment advisor to review your holdings and take into consideration any changing goals or circumstances.
Co-authored by Janice France-Pettit and Vernell Taylor. France-Pettitis a senior vice president and regional manager for Union Bank. The column is intended to provide general information about financial spring cleaning and is not considered financial or tax advice from Union Bank.

 

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