Spring Cleaning For Your Financial Life

Maura Schauss |

By Todd Youngdahl, CFP®

Taxes have been filed, the days are getting longer, and spring cleaning is on your mind. While you’re deciding on projects to take care of around the house, add some financial cleaning to the list. Getting your financial life in order may seem daunting, but think of it as a way to contribute to your own financial success. Consider the following tips to get started on the path of financial organization.

1. Consolidate The Clutter

Despite how digital our lives are becoming, there are still times we need physical documents. Find a system that works for you, whether it’s a binder, a locked filing cabinet, or an in-home, fireproof safe. To start, separate your financial papers into three categories: bills, documents or statements to save, and old items you can toss. Gather everything together neatly and store it in one easy-to-access place.

Getting your documents organized not only helps you but also benefits your spouse and family. Develop a master directory that lays out all your financial information to help you manage your affairs and serve as a guide to your family members if they ever need to assist with your finances. Be sure to include account numbers and logins and keep this document password-protected or under lock and key.

2. Invest In A Shredder

Now that you have a system for your paperwork, go through your old files and get rid of documents you no longer need. Keep tax documents for seven years, investment documents for a year, and bills until the payment has gone through (unless you need them for tax or warranty purposes). If you are still holding onto paperwork pertaining to a car or house you’ve sold, shred it and move on. With so much of our information digitized and easily accessible online, there’s no need to keep piles of documents around.

3. Go Paperless

If you want to minimize the amount of paper that piles up on your counters, save a tree and get rid of clutter by enrolling in paperless document delivery for all your bills and financial services.

Use a password management tool to help you keep track of your countless usernames and passwords so when you want to access account details, you can find all your information in one place.

4. Be A Minimalist

Do you like the idea of simplifying? Your finances might benefit from this approach. Do you have multiple bank accounts that you could consolidate? What about extra cash lying around that could be invested? Do you have rarely used credit cards? All of these things can be streamlined. Also, take a second look at your spending habits and create a budget that will help you stay on top of your finances.

5. Automate Everything

Automating your bills and savings not only streamlines and organizes your life, but also has long-term benefits for your financial world. Paying your bills automatically tends to improve your credit score, makes budgeting simpler, and can also make income tax preparation easier.

Additionally, by automating your savings, you give yourself a chance to save before you can even touch the money.

6. Tackle Your Debt

If you are motivated to conquer your financial goals, one of the first steps you need to take is to eliminate debt. When you are paying 10-30% interest on any number of credit cards or loans, you are cutting down on the money you have available to put toward your goals.

Become relentless about reducing your debt and interest costs and consolidate accounts where you can. If you have a loan with a significantly higher interest rate than the others, you may want to work on paying off that one first. Or, if you're feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, in order to gain some momentum.

An emergency fund can help you avoid accumulating more debt. By creating a liquid, easily accessible savings account, you won’t have to rely on debt to cover those inevitable life expenses, such as home repairs or medical bills. Create this cash cushion by putting aside money from each paycheck until you have enough to cover approximately three to six months’ worth of living expenses. You will never regret having an emergency fund at the ready.

Ready To Get Started?

Working with a financial professional involves more than just opening an IRA and setting up monthly contributions. Advisors add value to your money and your life by taking care of the details and giving you confidence in your financial future. If you want to benefit from the knowledge and experience of a financial advisor as you spring clean your finances, schedule a meeting with Todd or contact our office at 703.584.2700 or clientservices@washingtonwealthadv.com.

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.