How to Spring Clean Your Finances

brush-jim stigmanThe seasons have changed and those on the east coast of the United States are finally catching the feeling. During this time, It is not uncommon to use the warm weather to your advantage by cleaning out the things you no longer need. You may be cleaning out your closet, your dresser, or car. However, don’t forget to pay special attention to those finances. After a short assessment, you will most likely realize that those need some cleaning love too. Try implementing these steps for a more minimalistic financial picture.

Before you decide what to get rid of, take the time to define the word clutter. Stress may be a good indicator of what items are a burden. If it functions, leave it alone, but if it causes distress, deal with it.

Gather everything in one place and create a sorting system. Separate the documents from temporary to permanent. Also, acknowledge what things appear online. If there is a digital copy, a hard copy will be unnecessary. Some examples of categories may be pay stubs, tax forms, and bills.

After identifying the permanent documents, develop an emergency kit to house everything in one spot. You may need to access any variety of paperwork in case of an unexpected situation. Examples of documents to keep in case of emergency include birth certificates, deeds, marriage licenses, and records of paid mortgages.

There is an appropriate timeline for certain articles of paperwork After one year, pay stubs, utility bills, quarterly investment statements, and cancelled checks or bank statements can be shredded. Certain steps and check should take place before discarding items, but once you are sure, discard and don’t look back. Items to keep for at least three years include home improvement records, medical bills and cancelled insurance policies, and income tax returns.

Those are just a few tips to consider this April, which is National Financial Literacy Month. To learn more from Penn State’s financial literacy expert, Daad Rizk, see the PSU article here.