Spring is a great time to take a look at your finances and do an inventory of your exact financial health. Life moves fast and sometimes things can get forgotten and left behind. That is ok if we are talking about finding your flip flops left in the boat all winter but definitely not when it comes to your money.
First step is to make a master list of everything that involves your financing. List all retirement accounts, checking, savings, bonds, stocks, credit cards, etc. Make sure you add contact information, account numbers and general balance for each account. Store a hard copy in a file and another on a hard drive.
Once you have everything together, it is important to check things over carefully.
Do you have:
1) SAVING BONDS that need to be cashed in. Over time they stop gaining interest and by cashing them in, you can get additional bonds at a higher value.
2) CREDIT CARD interest rates. Check all current credit card rates to make sure they haven’t risen slowly over time. If so, transferring balancing to lower interest cards will save you money and help to pay them off sooner. If by doing so you have a zero balance card now, you can either keep it for emergencies or send the company a letter stating you wish to close the account.
3) CHECKING AND SAVINGS accounts often carry a free life insurance policy with them. Most people don’t know that just by mailing in an acceptance form with the bank, they can be enrolled in a free policy. The amount is not very much, maybe a few thousand, but at times of death every dollar counts. Check with your banks and see if this is a possibility.
4) RETIREMENT OR IRA accounts should be reviewed as well. You may have old accounts from companies you have left in the past. These funds can be transferred to existing accounts or even be used in a self directed IRA which can invest in just about anything like real estate, private companies and precious metals.
5) RECORDS can stack up and often we feel the need to retain them for years. The truth is three years is an adequate amount of time to keep records regarding finances. Even the IRS says that unless you have unusual circumstances, three years is all that is required.
6) ACCOUNTING SOFTWARE is a great tool for tracking spending and your overall financial health. Many companies offer free trials to get you started and try their service. For budgeting and tracking spending, these programs are a great idea for every household.
Make spring time finance review an annual thing for you. It feels much better knowing that things are in order and organized if anything should happen. Being cognitive of what’s happening today is always the key to success in the future.