Spring is the perfect time to declutter and freshen up your living space, but it’s also a great opportunity to tidy up your finances. With tax season in the rear-view mirror and the arrival of warmer weather, now is the time to take a closer look at your financial situation and make any necessary adjustments.
Whether you’re looking to declutter your physical documents or add some organization to your monthly spending, these six tips for financial spring cleaning will help you get on track and stay there. Let’s get started!
#1 Know which copy to keep
It’s always a good idea to keep copies of important financial documents, but paper copies can add up to a lot of clutter in your home. Thankfully, it’s safe to keep some of the most important paperwork on hand as a digital file instead of the original copy.
In the table below you’ll see which documents should be kept as their original copy, which you can keep electronically, and how long you should keep them. If you have any questions, your financial advisor can help.
| Document Type | Retention Type | Retain Original or Electronic Copy? |
|---|---|---|
| Tax Return and Workpapers | At least 3 years, 7 is best* | Original or Electronic |
| Bank Statements | 1 Year | Original or Electronic |
| Investment Account Statements | 1 Year | Original or Electronic |
| Paystubs | 1 Year | Original or Electronic |
| Large Receipts | 1 Year | Original or Electronic |
| Medical Bills | 1 Year | Original or Electronic |
| Property Titles | As long as you own the property | Original |
| Deeds | As long as you own the property | Original |
| Warranties | As long as you own the product | Original or Electronic |
| Insurance Policies | As long as you own the policy or until the policy is updated | Original or Electronic |
| Annuity Contracts | As long as you own the annuity | Original or Electronic |
| Birth Certificates | Forever | Original |
| Social Security Cards | Forever | Original |
| Marriage Certificates | Forever | Original |
| Divorce Decree | Forever | Original |
| Estate Documents (Wills, Living Wills, Powers of Attorney, Trusts, etc.) | Forever, or until new documents are executed | Original |
| Beneficiary Forms | Forever, or until new documents are executed | Original or Electronic |
#2 Go digital
Once you’ve determined which documents you no longer need paper copies of, it’s time to file them away electronically. The easiest way to do this is to use a scanner to make a digital version of your important documents.
Certain documents like bank statements and medical bills might already exist in your client portal with your bank or doctor’s office. Log into your accounts to see if the documents are already there.
Pro Tip: Got a lot of paper? Let technology help you out! Many to-do list apps can help you digitize and organize your paper records.
#3 Back it up
The next step for your digital files is to back them up. Create backups of all of your important documents and account information. That means backing up digital files on another hard drive and backing up your backups by storing them in the cloud.
Pro Tip: Create a “master” file as a “key” to explain how your backups are organized and where to find what information. You can also organize financial access passwords with a secure password manager.
This reorganization can help you out with your next financial spring cleaning. This can also give you a head start on estate planning, allowing an estate executor to access all of your digital assets and information.
#4 Purge the paper
With your digital files safely filed away, it’s time to get rid of any paperwork you no longer need. The most secure way to dispose of sensitive financial documents is to shred them. If you don’t have a paper shredder at home, most office supply stores can shred documents for a small fee.
Go paperless for recurring bills and monthly financial statements. Also, go through the financial documents you have on hand and shred the old paperwork you don’t need anymore.
Pro Tip: Is unwanted mail clogging up your mailbox? Visit www.optoutprescreen.com to stop getting irritating solicitations like credit card applications and loan preapprovals.
#5 Audit your subscriptions
Review all of your subscriptions and cancel any you no longer use or need. That includes subscriptions for streaming services, software, magazines and newspapers, gaming, and even product deliveries.
Pro Tip: Use your credit card and bank statements to figure out all of your subscriptions, so you don’t overlook any. Also, consider signing up for subscriptions using the same card, so it’s easier to audit them in the future.
#6 Check in with your bigger financial goals
How are you doing on your financial goals, big and small? What progress have you made and where are you falling short?
Reviewing where you’re at, how far you’ve come, and where you want to be can help you figure out when and how to adjust course, so you stay on track.
Pro Tip: Turn this step into a conversation so you can get feedback and a fresh perspective. Talking about your bigger financial goals can motivate you to stick with them
Bonus Tip: Ask a professional
Need more ideas to organize your financial life? Market Street’s financial advisors can set you
up for success this spring and beyond.
