Between putting the winter toys away and anticipating upcoming COVID freedoms, now is a great time to freshen up your finances!
Clear out the Clutter. I recently helped my dad clean out his office. He still had the paperwork from my Blue Lake home that he co-signed with me back in 1989. Wild to see a 14% interest rate! He also had credit card statements for the past fifteen years. Do you have old tax returns, brokerage statements or other financial documents? With cloud storage, eliminate or minimize the paper. Financial institutions – CPA’s, financial advisors, and brokerage firms keep secure copies, so many times you don’t need to. Review for accuracy, and intent, but don’t stockpile paper. Make sure your cloud storage is secure and any private information passed back and forth between professionals is encrypted.
Prior to 2011, you were responsible for keeping track of stock or mutual funds purchases and tracking your cost basis information. With securities bought before then, get your purchase confirmation history to your current custodian. Your brokerage firm or custodian is now responsible for keeping track of what you buy, sell, when and for how much. You are now free to pursue the “why” of your investing and determine the best tools and techniques for accomplishing your goals.
Do keep the receipts for improvements on your home as it increases your cost basis which you will need if you decide to sell. Scan them into a computer file, back it up, then shred.
Make sure you dispose of old documents safely. There are several shredding services in the valley as well as businesses and fund-raising efforts that provide opportunities a couple times a year.
Expunge your spending plan. Are you paying for services or products you no longer want or need? Reviewing your cable, internet, insurances, cell, and other bills will allow you to reconnect with the value they provide or changes that can be made. Those Apps and subscription services add up and need to be purged at least once a year.
Consolidate your investments. Career changes, physical moves, retirement – a lot has changed in the past year. Consolidating accounts or rolling old employer plans into your own IRA or new employer plan will simplify your life. Several custodians does not equate to “diversification”. Rules for distribution and roll over vary, so consult your financial advisor on how this would affect your individual situation before moving forward. Look at your investment strategy, current economic and tax environment and make sure your money is working efficiently for your needs.
Explore with a Spring Scavenger Hunt. Check out http://www.colorado.gov/treasury/gcp to see if you have any financial “treasures” that have gone unclaimed. There are treasure troves in every state you have lived in. All states have rules around abandoned or unclaimed property. Usually, after five years, if a financial institution hasn’t heard from you, this property “escheats” to the state and you have to reclaim it. Make sure you have current on-line access and set up three factor identification with your financial institutions.
Look around the house for items that don’t serve you or are a money drain. Donate or sell them. You get a tax deduction for donated items. The cash from a garage sale or consignment store can be put into savings, pay down debt or support a local business.
Finally, tear down mental monetary cobwebs. Do you have money mindsets that entangle you? What negative financial scripts keep repeating themselves? ‘The Financial Wisdom of Ebenezer Scrooge : 5 Principles to Transform Your Relationship with Money’ by Drs. Ted and Brad Klonz will help you become the master of your money, instead of its servant. You can refresh or replace belief systems and behaviors in all areas of your financial life.
Freshening up your finances won’t take long. With my home spring cleaning, I make my list, and systematically check it off over several weeks. More than you want to tackle? Find someone to clean your windows or manicure your yard. Same with your financial spring cleanup. There are organizers in the valley that will help you with paper or household clutter and financial professionals to walk alongside you with the investments or financial tools. Picture how good it will feel to get it done!