Mississippi Money: Financial Spring Cleaning
Throughout the year we accumulate a lot of financial mess. We save documents that we don’t need, we open accounts that we forget about and we lose track of our goals. Now that you’ve tasked your children with some overdue spring cleaning of the house, you can get your finances in order.
Start with the low-hanging fruit – actual paper that is piling up. It is easy to just drop everything in one place but that pile needs to be cleaned up! Keep documents related to major transactions (house deed, mortgage documents, car title, wills, inheritance documents) in a secure file forever. Tax documents can be all thrown out after 7 years, but you may want to keep the main tax return, at least digitally. Utility bills, pay stubs and receipts can be thrown out once they are all paid up and you don’t want to save them to dispute.
If you have not checked your credit reports in the past year, do so now! You are entitled to one free credit report each year from each reporting agency (Experian, TransUnion and Equifax). You can get these in paper form or check it online at www.annualcreditreport.com. This report will list every line of credit you have ever had. Your credit card company or a free service like Mint.com can be useful in monitoring your open lines of credit and your score.
If that credit check turned up any old debts, make a plan to tackle them! Dave Ramsey’s snowball method focuses on the first, easiest to pay off debt first. That is a great way to get some of the nastiest cobwebs out of your financial attic. With high interest credit card debt, call and ask to get your interest rate lowered, or look into 0% interest rate, no fee balance transfers that can save you serious money and get past bills behind you. Your financial goals need a check up. If you have any looming expenses, make sure you have the cash saved up for them. If you recently spent your emergency savings, find an extra $100 in your budget to start replenishing it.
Give your retirement accounts a boost! If you have an employer sponsored retirement plan, raise your contribution by a percent or two. You won’t even notice it! If you have personal IRAs, 2018 is a great year to contribute to a Roth IRA. With the recent tax cut, your rate is lower than it will be in the future, so you can set aside money now that will never be taxed again! Look at consolidating accounts. If you changed banks, got married or got a new job, you likely have one that can be closed. Consolidate your cash savings accounts to an online savings account that will give you a decent interest rate and will keep your hands off the cash. If you have a retirement account at a job you no longer work for, it is best to roll that over, either consolidating it with your current employer plan or a personal IRA. Make sure you have a view on all of your accounts and check recent statements – electronically.
The last treat that you might find is unclaimed property. Check the State Treasurer’s office to see if there is any lost property in your name. Financial clutter can come with a great cost if it is an old debt, or it can be a nice surprise if it is extra cash!