Monday, 16 May 2016
Now that you have accomplished your spring cleaning at home, why not welcome summer by taking time to tidy up your finances, too?
Here are some simple suggestions for improving organization, reducing clutter, and getting a fresh start with your personal finances.
Keeping important paperwork is always a good idea, but hanging on to 5-year-old checking account statements isn't really necessary. As a rule of thumb, you should keep all your bank statements, paycheck stubs, and bills for up to a year. After that, it's time to shred them. Tax-related paperwork and receipts, however, should be kept for seven years.
Are you paying for memberships or subscriptions you're not even using? It's all too easy to sign up for autopayments and forget to turn them off when you stop enjoying the service. Review the charges on your checking account or credit card and cancel anything you don't use regularly. Take the time to review your other monthly expenses like cable and wireless phone service to make sure you're utilizing all the channels and services you're paying for.
Why not stop receiving paper statements altogether? It only takes a few minutes to go online and change your accounts to paperless billing. Electronic bills and statements are usually safer than paper, and much easier to organize and store. They're obviously better for the environment, and in many cases they're free. Plus, you won't have to worry about shredding a bunch of paperwork when you're spring cleaning your finances next year.
Identity thefts are getting more clever all the time. You should protect your online accounts by changing your passwords at least once a year, and you definitely shouldn't use the same password for multiple online accounts. Regularly changing your passwords and making them more complicated can help protect you from identity theft.
Budgets are most effective when they are regularly updated and revised. Take the time to analyze where your money is going, and where you need to tweak your budget. Are there areas where you could be saving more or spending less? How much debt do you have, and do you have a plan to pay it down? Reviewing your budget is especially important if you've experienced any financial or life changes in the past year, like an increase in salary, marriage, or birth of a child. Using the budgeting tools available through most online banking services—including BBVA Compass Online Banking—can make analyzing and adjusting your budget surprisingly easy.
You are entitled to one free credit report from the three major credit-reporting bureaus each year. Why not take advantage of this to review one of the most important aspects of your financial health? If you spot any errors, immediately contact both the credit bureau and the company providing the information quickly so you can start the process of correcting any mistakes.
Whether you're getting married or making major purchases, your life can change a lot over the course of a year, and this could have a direct impact on your insurance needs. Review all your insurance policies annually to make sure you have proper and sufficient coverage, and see if there are ways you can save money on your coverage.
In most cases, you have until April 15 to make contributions to your Individual Retirement Account (IRA). Take this opportunity to maximize your contributions to any tax-advantaged retirement accounts you may have. Make sure you consult your tax advisor or plan administrator regarding contributions and their tax implications.
The content provided is for informational purposes only. Neither BBVA Compass, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA Compass or any of its affiliates.
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