Page 2 - Midway District - March 2017

FAMILY & CONSUMER SCIENCE JAMIE RATHBUN

Spring Clean Your Finances

Spring is the perfect season to give your financial house a thorough cleaning. Knowing where important
papers are filed saves you and your loved ones from panicky digging in an emergency.

Step 1: Taming the Paperwork

Paperless? Financial software? File cabinet? Binder? Whatever you choose, it has to be a system that
works for you and that you’re going to follow. Simple is best. Set up one folder, tab, etc. for financial
information, another for life insurance policies, other for auto- and health- insurance, copies of legal
instruction (will, power of attorney), financial statements, credit card information (including PIN). Unpaid
bills go somewhere where you won’t forget about them; paid bills get placed in another file. Also, make a
file for contact information for important individuals: lawyer, accountant, personal financial advisor, those
who take care of your house and car, financial dependents. See Save It or Shred It?

Step 2: Creating a Budget

For many people “budget” is a dirty word. In reality, a budget is a powerful tool. By showing where the
bulk of your money is being spent, a budget helps you to match your priorities to your pocketbook. Most
people look at the large expenditures for every month – mortgage or rent, health insurance, medical bills,
utilities, etc. – and then guestimate the rest of what they spend – groceries, fast food, magazines, kid’s
activities, etc. But the rest of what we spend adds up to a lot of money. A simple way to find a solid number
rather than a guestimate, use cash. Calculate what you think is the proper amount, and take it out in cash
once a week on the same day for three weeks. By the end of the first week, you’ll know exactly how much
you spent. If you need to take out extra money three weeks in a row, you’ll know your initial estimate was
way off. Once you know where the money goes, you can choose where to spend and what to slash.

Step 3: When to Pay What

Once your cash flow is solidly grounded in fact you’ll want to be able to regulate it smoothly. Whether
you use a paper calendar or an electronic calendar with reminder alerts is up to you. But choose a method
that will help you avoid unpleasant surprises. Use this calendar to list when to pay bills, and when to plan
other financial tasks.

Document Recommendation
Bank Statements SAVE for one year, unless needed for tax filings
Contracts SAVE until updated
Credit card records SHRED after paying, unless needed for tax filings
Home purchase/improvement records SAVE as long as you own the property
Household inventory of assets SAVE forever; update at needed
Insurance: Life SAVE forever
Insurance: Auto, home, etc. SAVE until you renew the policy
Investment statements SHRED monthly statements SAVE annual statements until you sell the
investment
Loan documents SAVE until you sell the item
Power of attorney SAVE until updated
Real estate deeds SAVE as long as you own the property
Receipts for larger purchases SAVE until you sell or discard the item
Service contracts SAVE until you sell the item
Social Security card SAVE forever
Social Security statements SHRED the old one when you get the new one
Tax records SAVE for seven years from filing date
Will SAVE until updated