Financial Spring Cleaning

Spring is a great time to do financial spring cleaning, as you are getting ready for taxes, or just after you’ve filed.  File tax support documents and completed taxes in a labelled folder, envelope, or box, and keep for seven years (or as your tax advisor recommends). After that time period, keep just the 1040’s, and then shred receipts and other bulky items.

 

If you need some motivation to get you started, check out classes like the Filing Freedom class from HeartWork Organizing.

 

Not feeling the paper?  Organize with some pretty accessories.  File folders are available in pretty colors, these days. It may seem frivolous, but if that’s what it takes, then go ahead and splurge!

how to organize with file folders

 

Spring is also the season for community shredding events.  Google your city or region + “shredding event” to find events near you.  They are usually free or very low cost, and often shred your documents on the spot. I’ve published a handy list of Philly area shredding events for you here.

financial organizing

You don’t need to shred everything with your name and address on it, which are both easily gotten from a quick google search.  Instead, be certain to shred anything with a financial account number showing, and recycle the rest.

 

Remember that you’ll want to keep more documentation if you take the home office deduction or run a business or independent consultancy from your home. Check with your tax advisor to be sure you are keeping enough data, and not too much. There’s good news in 2013 from the IRS about simplified filing for your home office tax deduction.

 

Most households have the equivalent of about two file drawers of historical paperwork. You might challenge yourself to see if you can get down to about that amount, and live within your filing space without taking over the dining room table.

 

If you are planning on going paperless with your finances, be sure to have a backup, and maybe back that up, too.  An automated cloud service like Carbonite + an automated hard drive backup like Seagate is a powerful combination. Use the promo code “APPO” from me to get two free months of Carbonite backup service.

 

Many coupons expired at the end of last year, so coupon clippers can save a lot of space by starting over, or signing up for digital coupons from places like CouponCabin.com, or just looking for deals as needed on places like RetailMeNot.com.

 

Organize and slim down the collection of shoppers club cards by using the CardStar app to enter your shopper bar code into your smart phone or tablet.

 

Receipts for minor purchases that are not tax related can either be stored for one year in a box labelled current year (2013), or they can be scanned into an app like ShoeBoxed.  Either way, they should come off the kitchen counter and desktop.

 

Many people are now reviewing only their online bank statements, but still receive paper statements that they never open. Make the call to cancel your paper statement if there is no other reason to archive them. If you still want to save a copy, file them in an email or document folder on your computer and take up no physical space at all. Beware, many banks only save the last 6-12 months of statements, so be sure to save an e-copy to your computer if you want to save them longer, and back that up. (see above)

 

Take 5 minutes to check your credit report at www.AnnualCreditReport.com. It actually takes 5 minutes, and is free once a year. If the information is correct, the is no need to print the report.  If there are errors, which a recent report stated 40% of us have, you can take steps to correct them.

 

Want to be a financial organizing superhero?  Take another 5 minutes to call your HR department and max out your 401K contributions, at least to your company match level, and maybe even to the pre-tax plan max which is usually higher. The company match means free money, so it’s definitely worth your 5 minutes.

What other Financial Spring Cleaning steps are you taking?

 

shredded paper photo credit www.123RF.com.

 

 

 

 

3 Responses to Financial Spring Cleaning

  1. Becky, it depends. No need to keep receipts for non-taxable items that are consumed. Tax-related receipts should be kept with taxes. Major purchases, like appliances, should have the receipt and warranty paperwork stored together. Business receipts are different, of course, but should generally be entered and stored with accounting info.

  2. I need to do this. I have a lot of old papers that I could get rid of instead of buying more file cabinets. Making a checklist for myself to get started.

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