The Fall Financial Cleanup

FALL IS HERE! The leaves are changing, the days are shorter, and we are all gearing up for the holidays.

It’s also that time of year when a lot of us start what I like to call the “fall cleanup”.

We swap out our clothes and we empty our closets and drawers of all the unnecessary things we’ve accumulated over the season, or even the whole year. And if you’re anything like me, you continue this purge throughout the whole house.

No drawer or closet is left unturned. I’m on a mission!

But why stop at the linen closet or junk drawer? This is also the perfect time to take a look at our financial “junk drawer”. I’m not just talking about that filing cabinet where you have bank statements that date back to March of 2014.

I’m talking our whole financial picture. Let’s jump in and clean it up, too!

Here are 5 things we can do to lighten the load and pave the way for a clean start in 2019; which is right around the corner.

1. Take inventory. We should know what we actually have in order to clean it up. Make a list of what you own vs. what you owe. Do you have a budget and have you been following it?

Take some time to go over your spending for the last few months. Our budget is the foundation for our financial empire. How did you do? If you feel you’ve had to tweak it often, then you may be overspending and need to set a more realistic plan.

2. Consolidate accounts. Some of us find that we have several bank accounts that we rarely use. How many accounts do you have? What are the fees? Are you getting the best rate for your money? Interest rates have been on the rise - so you may want to take advantage of some of the better interest paying savings accounts. While you’re already checking accounts, take a look at your 401(k)’s. Some of us may have old plans from previous employers. Consider rolling these accounts into an IRA. Aside from streamlining your banking and retirement savings there could also be cost benefits in consolidation.

3. Automate. Go paperless with checking account statements, investment accounts, and credit cards. These days, even your utility company will let you pay online. Get rid of all of that paper that clogs up your mailbox and winds up in the junk drawer! In addition to automating your bill pay, consider automating your savings. Out of site; out of mind. Set up an automatic savings plan through your bank. Some employers even allow you to split your pay into 2 separate accounts.

4. Sort paperwork & shred the rest. This step actually adds to the literal aspect of the cleanup! Take the time to go through all of your paperwork. You really only need to keep bank statements for a year, and you can discard tax documents (and their supporting records) after seven years. After all, once you’ve automated your finances you can always access old statements via your bank or credit card company’s website. Be sure to shred any docs that have personal or sensitive information in order to protect yourself from identity theft.

5. Prepare for holiday spending. Consumers say they will spend an average $1,007 during the holiday season this year, up 4.1 percent from the $967 last year, according to an NRF survey. If you haven’t already, create a budget for holiday spending. Research the items you intend to buy and when they may be sold at the cheapest prices. Take advantage of Black Friday or Cyber Monday. And remember its never a good idea to go into debt to buy presents.

Having a clear understanding of our financial picture is the only way we can conduct a thorough and productive clean up. Just because we don’t open that drawer or filing cabinet doesn’t mean it isn’t there. Having a clean space in the physical and financial sense gives us a feeling of liberation and accomplishment. Our financial journey is one that we must consistently work on, but this is a good starting point.

To learn more about these 5 steps or your own unique financial plan call us 212.344.5867