Just as spring cleaning can revitalize your physical space, financial decluttering can simplify your financial life. This process helps organize your finances, reduces stress, and fosters a sense of control over your financial future. Here are five key strategies to get you started:

1 – Go Digital

Ditch the paper trail! Shred outdated bank statements, pay stubs, and receipts once you’ve verified the existence of secure digital copies. Most financial institutions offer online statements, rendering physical copies unnecessary. The IRS will generally ask for the last three years of returns in the event of an audit and recommends keeping your tax returns for seven years if you file a claim for a loss from a worthless security or bad debt deduction. Prioritize secure digital storage using a reputable cloud service or a high-quality external hard drive. Remember, physical copies are vulnerable to loss or damage in unforeseen circumstances.

2 – Automate Bill Payments

Eliminate the burden of overflowing mailboxes and the risk of missed payments by implementing automated bill payments, a convenient service that deducts monthly payments directly from your designated bank account. This saves you valuable time, ensures prompt payments, and can contribute positively to a healthy credit score. Additionally, it eliminates the physical clutter of paper bills. Set up automatic payments for your convenience, but remember to maintain sufficient funds to cover these automatic withdrawals.

3 – Consolidate Retirement Accounts

Frequent job changes can lead to a scattered trail of inactive retirement accounts from previous employers. Consider consolidating these accounts into a single IRA. This simplifies tracking your overall retirement savings and facilitates effective management aligned with your retirement goals. Consider consulting a fiduciary financial advisor to discuss potential rollover options. Remember, a single, consolidated account may help provide a clearer picture of your retirement readiness.

4 – Review and Close Unused Accounts

Conduct a comprehensive review of your bank accounts and credit cards. Close accounts that remain dormant to minimize the temptation for unnecessary spending and the potential for recurring account fees. When consolidating bank accounts, ensure adequate protection of your funds by being mindful of FDIC insurance coverage limits. Closing credit cards may cause a temporary dip in your credit score; however, most individuals don’t require more than 2-3 of each account type. Reviewing old accounts can also uncover forgotten funds – a pleasant financial surprise!

5 – Use Gift Cards and Credit Card Points

Unused gift cards and credit card points lose value over time. A recent Credit Summit survey (2023) revealed a staggering $21 billion in unused gift cards! Don’t let these rewards go to waste. Maximize their value by utilizing them yourself, re-gifting them to loved ones, selling them through a reputable exchange platform, or donating them to charity (which may qualify for a tax deduction). Breathe new life into these financial rewards!

This is intended for informational purposes only and should not be construed as personalized investment advice. Please consult your investment professional regarding your unique situation.

    Author Jonathon D. Merickel Portfolio Advisor

    Jonathon has been involved in the financial services industry since 2002. He earned a bachelor of science degree from Syracuse University and an MBA from Le Moyne College.

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