Spring cleaning doesn’t have to be reserved for chores around the house – the months following tax season serve as the perfect time to give your finances a cleanup as well. Because you have recently sorted through your financial documents, you are likely to have a good feel for your financial situation, making now as good a time as any to ensure you are on the fast track to savings.
Here are five steps to take post-tax season that will help you boost your savings heading into the warmer months.
Secure Your Tax Info
Keeping your tax returns and supporting documents is a sound practice because these materials can help you prepare next year’s taxes and can provide documentation should any questions arise about your records.
But think twice about stuffing these documents in an old shoe box in the back of the closet. These materials contain the social security numbers and other important identifying information of you, your spouse and any dependents you have claimed, creating a liability for identity theft.
If you are keeping paper records, store them somewhere secure, like a locked safe or desk drawer. If you are storing your records electronically, be sure that your hard drive is backed up in case of a crash. Taking the proper steps to secure this information will prevent loss of funds resulting from a stolen identity.
Review Your Retirement Savings
Reviewing your retirement savings on your own or with a financial advisor is crucial, and should be done at least yearly, if not twice a year.
Taking a look at where your savings stand can help you reduce unnecessary costs and assess your progress towards your financial goals.
Ensure that your allocations are in line with your objectives, that you are contributing as much as you can to your savings, and decide whether you are willing or able to take on other investments.
By looking at your retirement with a critical eye, you put yourself in the driver’s seat for maximizing your savings and improving your lifestyle later in life.
De-clutter Your Finances
Too often, individuals have too many bank accounts and credit cards open, making their finances difficult to manage and making bills easy to miss. Take this time to see what you can consolidate. Research which banks provide the best features and interest rates, and keep all your money within one bank. Having too many credit cards can also cause financial issues, so make an effort to reduce the number you carry. Keep in mind, however, that canceling a card can affect your credit score, so aim to leave your oldest cards open. By de-cluttering your accounts, you will be able to keep a better pulse on your finances and avoid missed payments.
Having stacks of paper bills lying around can also wreak havoc on your finances. Most companies and banks allow you to set up email, text or smartphone notifications when you have a bill coming due. And most have the option to set up automatic payments as well, which can help avoid that late fee. Just be aware of when the automatic payment will occur to be sure you have the funds to cover it in your account.
Shine and Polish Your Debt
Take this time to reassess your debt. Consider whether consolidating your loans would help make payments simpler and reduce interest rates. Ask yourself whether you have stayed on track with your repayment goals, and if not, assess what you can do to get back to where you aimed to be. Track your payments and progress towards your
If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.
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