Cleaning Up Finances While at Home for Social Distancing

Maura Schauss |

By Maura C. Schauss, CFP®

Coincidentally, social distancing and spring cleaning are occurring simultaneously this year! For some, organizing and decluttering is a hobby, but for the rest of us, now is a perfect opportunity to not put off getting our finances in order any longer. Either way, having a good understanding of your finances will relieve some stress during this time because you’ll see where you can improve and what should stay the same.

Here are a few ways to make the most of your extra time at home, while also bringing clarity to your financial situation (including where all your important information is being stored).

Consolidate Financial Clutter and Documents

This can seem like a daunting task, but think of how you’ll feel when it’s all done! Shredding old bank statements, pay stubs, and anything that has your personal information on it from more than 2 months ago is a great place to start. This decreases the risk of identity theft, frees up extra space, and allows you to find important documents much faster. For those important documents you want to save, WWA has online vaults for their clients. Here you can create folders for taxes, real estate, investment statements. Etc. The majority of banks, credit unions, and employers keep a digital file of all these statements should you need them for any reason.

Paper documents related to investments, home improvements, and taxes should be kept for seven years. Use the following link to find more details on what records to keep and for how long.[1]

Check Your Credit

Did you know that the federal government allows you to get a free credit report once per year? You can request yours at www.annualcreditreport.com or by calling 1-877-322-8228.[2] Unlike some free credit reporting options, these are accurate records of your credit from three national credit bureaus. Whether you have great credit or you’re a little nervous to check your score, the important thing is that you are staying informed.

It’s important to take advantage of this even if you know the exact balance and interest rate from every creditor you pay. Doing all your banking, shopping, vacation bookings, and investments online are great for convenience, but having that personal information transmitted through the internet means you’re more susceptible to cyber attacks and identity theft. As a result, there is a higher chance that someone could obtain that information and start using your credit without you being aware of it.

Review Your Interest Rates and Create a Budget

If you call your creditor to see if there is anything they can do to lower your interest rates for credit card payments, many times they will. Depending on your credit, consider consolidating to a 0% interest rate credit card and transfer the balance so you can pay off the debt faster. Also, look at refinancing any vehicle loan you have to pay off the debt faster or decrease the minimum payment so you can put more toward savings for emergencies.

If you haven’t used a budget before, a few easy-to-use budgeting apps to choose from are Mint, PocketGuard, GoodBudget (multiple users can access the same account), and YNAB or EveryDollar for zero-based budgeting. Some of these are free or have options to upgrade to a version that enables your banking to be automatically synced with the app. This way your expenses are imported into the app, allowing you to quickly assign expenses to all your budget categories without manually importing anything.

Finish Your Cleanup

Now the hard part is done and you can take comfort knowing you are completely aware of your finances and where things are when you need them. A great way to wrap up your time getting organized is by doing a 60-second financial checkup we created for you to identify a financial goal you want to work toward achieving. 

We at Washington Wealth Advisors enjoy seeing the whole picture of what’s important to you and creating an action plan to make it happen. Call our office at (703) 584-2700 or email clientservices@washingtonwealthadv.com to set up an introductory meeting.

About Washington Wealth Advisors

Washington Wealth Advisors is an independent registered investment advisory firm serving high net worth families and small businesses. We focus on holistic financial planning and comprehensive investment management. Leveraging our core strengths of unbiased, active investment management together with a detailed annual financial planning capability, we serve your comprehensive investment and financial planning needs.