Spring is in the air, which for many means cleaning out the clutter. But don't forget about clearing the cobwebs from your "financial house," too! Even if you recently took a look at your finances as you prepared for tax season, there still may be some items that could use your attention.
Dust off your credit report and score
If you're planning to buy a home or make another big purchase, a good credit rating can be critical. Businesses also inspect your credit history when evaluating applications for insurance, employment, and even leases. With so much in the balance, it's important to review your credit report for accuracy at least annually. Plus, it's a good way to catch signs of identity theft.
You're entitled to one free annual report from each of the three major credit reporting agencies—Equifax, TransUnion, and Experian—which you can request at www.annualcreditreport.com. (Be wary of similar-sounding sites that charge you for these reports.)
Revamp your emergency fund
If you don't have one already, starting an emergency fund should be on your spring cleaning to-do list. The size of your fund depends on your particular situation and factors such as:
- Family size
- Current debt
- Insurance coverage
The standard is to set aside three months of expenses in case you or a family member encounters the unexpected, such as job loss. If you already have an emergency fund, you may want to increase your savings to six months of expenses. Remember, it's far better to have an emergency fund and never need it than to experience the reverse scenario.
Revisit credit cards
Review the terms and conditions of your credit cards to ensure that they're still in line with what you originally signed up for. In light of recent security breaches, it's more important than ever to check that the plastic in your wallet continues to meet your needs.
If your home office is overflowing with statements and receipts, switching to paperless transactions is a pretty simple way to streamline your life—and help the environment.
- Online banking. Electronic statements can conserve tons of paper and save you loads of time and trouble. You can track your balances in real time on your bank's website and transfer funds from your desktop. At work, direct deposit of your paycheck not only saves paper but also cuts down on trips to the bank.
- Electronic bill payment. You can arrange online payments with your bank or through various service providers, including utility, mortgage, and credit card companies.
- E-delivery of investment statements. We encourage you to sign up for electronic delivery of your account statements and trade confirmations. Going paperless is a simple, secure, and eco-friendly way to receive your documents.
Do an overall financial review
Take the pulse of all your accounts regularly, including your insurance policies, annuity contracts, retirement plans, and educational savings accounts.
- Are you on track to achieve your goals?
- Do you need to make adjustments?
- Are your beneficiary designations up to date?
Be sure to discuss any changes in your situation with us so that we can update your financial plan accordingly.
Although these financial spring cleaning to-dos may take a few hours, checking them off your list will free you up to enjoy the season—and ultimately save you time throughout the year.