Money Moment: Spring Cleaning Your Finances

image of Dr. Jennifer Hunter
By  Dr. Jennifer Hunter

As days get warmer many people get into ‘Spring Cleaning’. Even if you don’t have time to clean your house, take time to clean up your finances.

During recent bad weather I had time to de-clutter some paperwork. Because of the position of my dining room in relation to my front door, it is easy for clutter to build up from abandoned mail piling up.

I suggest developing a walk-in routine by filing mail immediately into an easily accessible movable accordion file. Another tip is to reduce the junk mail coming into the house by contacting direct marketing companies and asking to be removed from their databases. You can learn how to opt out of prescreened credit card and insurance offers through the Federal Trade Commission website.

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Much of the financial paperwork we have lying around is important documentation – and so you might use online systems to store your paper work in the digital realm, and utilize electronic banking services to help reduce paper clutter. Setting up direct deposit is one such way. It is convenient, and there are also perks such as no online checking fees.

Online bill payment is another tool to remove clutter. Setting-up online bill payment is easy to do and will ensure bills are paid on time. All that needs to be provided is a small amount of information, and the financial institutions take it from there. This can be set up either through a financial institution or directly through the vendor’s website at no cost.

Reducing incoming clutter is a great habit to develop, but the old paperwork lying around the house also needs to be managed. Shredding old paperwork that has personal information is a good way to dispose of older documents – especially paperwork with sensitive information. Before shredding ensure that there are no outstanding issues with the document – normally it is necessary to wait one year. Remember pay stubs and bank statements may be necessary to apply for loans in the future, and should be kept longer if you are planning a major purchase in the future.

As you are doing your spring-cleaning, it is also a good idea to update financial records for insurance and valuation purposes. Make a list of valuable items as you do your cleanup. A quick picture can also help document items for insurance purposes.

Jennifer Hunter serves the University of Kentucky College of Agriculture, Food and Environment and the School of Human and Environmental Sciences as an Assistant Professor in Family Sciences, State Extension Specialist for Family Financial Management, and Director of the Managing in Tough Times Initiative.

0 Replies to “Money Moment: Spring Cleaning Your Finances”

  1. An exception for shredding bank statements! They now include copies of checks that have been used to pay items included on a tax return. I worked with a client who received a letter from the State Revenue department asking for evidence of child care payments. The client didn’t keep copies of bank statements. When she went to the bank to ask for copies, they had changed software and had to load it to retrieve the years requested. They could have charged her for generating copies of canceled checks. I advise individuals to make copies of their bank statements that include items included on a tax return and keep them with tax papers for 7 years. Not sure what rules apply to bank obligations to provide copies of transactions.

    1. That’s a great story, Joyce. Thanks for sharing that. Yes, in certain circumstances keeping records for longer periods of time might make sense.

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