Spring is Financial Cleaning Season

Invest in a good shredder to destroy sensitive personal information to protect against fraud or identity theft.

It’s time to clean out, tidy up and purge our homes of things we don’t use, don’t need and haven’t worn in five years. This is also the season where we gather up all of our financial documents and do our taxes, says The Press Enterprise in the article “Add this to Kondo-spring cleaning list: Organize your finances.” While cleaning out paperwork may not feel as rewarding as piling up clothing to donate to a local charity, the time and energy saved will be appreciated in years to come.

Start by making a monthly payment schedule with company name, due date and amount due. Include estimated taxes, property taxes, insurance premiums and any other bills that you receive on a routine basis. Use this to help budget and plan for the coming year.

Set up electronic bill paying through your bank for recurring bills. You can make your mortgage payments, insurance and all predictable expenses occur automatically. Keep all paper bills that arrive by mail, like property tax and insurance premium notices, until they are paid.

Schedule a set time to pay your bills. That may be weekly, biweekly, or monthly, but make an appointment for yourself and stick to it. During this time, review your monthly payment schedule, review statements for accuracy, pay and then either file or toss.

Set up systems for your important documents. Don’t just stuff them in a file cabinet. Use a manual filing system, a three-ring binder, electronic scanning and storage or a combination of a few different methods. If you go all digital, make sure you have an encrypted and automatic back-up system.

If you don’t already have one, open a safe deposit box or purchase a highly-rated fireproof safe to store documents like birth certificates, marriage licenses, deeds, car registrations, estate planning documents and passports. Tell family members where these documents are located and provide instructions so they can be accessed in an emergency. In addition to yourself and your spouse, give a family member the ability to access your safe deposit box.

Consolidate your accounts. If you have more than one checking, savings, retirement or brokerage account, try to simplify your life by combining like accounts. Fewer accounts mean fewer statements, less paperwork and less hassle, when filing taxes.

The same goes for credit cards. If you can’t close cards because of outstanding balances, create a spreadsheet of outstanding balances, the interest rates you are paying and payment dates for each. Get serious about paying them off, attacking the ones with the highest interest rates first.

If you haven’t reviewed your estate plan or your beneficiary designations, review all your accounts and estate planning documents. This is a good time to make an appointment with your estate planning attorney, especially if you haven’t reviewed your estate plan in three or four years.

Reference: The Press-Enterprise (March 30, 2019) “Add this to Kondo-spring cleaning list: Organize your finances”

Suggested Key Terms: Finances, Payment Schedules, Automatic Payments, Estate Planning Attorney, Safe Deposit Box, Documents, Beneficiary Designations

About the author

Bob Brumfield

Attorney Bob Brumfield has been practicing law since 1984 and regularly receives the “Top Lawyers in California” award as well as the “Client Distinction” and “Client Champion” awards from Martindale-Hubbell.

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