Column, Money Matters

Financial spring cleaning

By Kevin Theissen

If you have been procrastinating on one, some or all aspects of your personal finances, why not apply the concept of spring cleaning to your money? The following are some ideas to get started or restarted:

Get organized

The first thing to do when organizing your finances is to collect all your information in one place. Some things to consider in your financial inventory are credit reports and debt, bank accounts and statements, credit and debit cards, retirement and health savings accounts, investment accounts and other assets and legal documents.

For virtual records, create a folder on your device where you can easily find and store financial documents. Include a copy of all the usernames and passwords for your financial accounts and tell your spouse or someone close to you where to find it in case something should happen to you.

Declutter your accounts

Over the time, it is easy for accounts to accumulate. You might have a 401(k) from an old job or a bank account you no longer use. Having accounts that you don’t monitor can put you at risk of identity theft and poor performance. Take time to close unused accounts and roll them over into ones you keep track of and manage.


Even in our increasingly digital world, a lot of financial documents still come in paper so shred old documents you no longer need. Most financial documents can be thrown away after three years including tax-returns, receipts, home-improvement records, medical bills, utility bills, credit card statements, and bank statements. Records of loans that have been paid off should be kept for seven years. For accounts that are active, keep everything and throw away individual documents as they’re updated.

Set up auto-pay 

Set up auto pay before the dates your bills are due so they are always paid on time. This saves a lot of time and avoids missing any payments.

Retirement savings

Saving for retirement is so important so check your plans and make sure your investments are on track.

When it comes to saving for retirement, a good goal is to try to save at least 10% of your income. Try to have at least three times your annual income saved by 40 years old or at least four times your annual salary by 50.

Evaluate the allocation of the investments in your retirement accounts. They might need adjustment or reallocation and it’s important to stay on top of the performance of your portfolio.

Create and maintain a net worth statement

Your net worth is the value of all your assets minus your liabilities. Your assets include cash, investments, and home equity. There are online tools that can guide you and track accounts, transactions, budgets, and home value to keep you up to date.

Update your estate plan

Everyone needs an estate plan no matter how much you own. There are several aspects to an estate plan. First is a will or trust. Most people assume they need a will but sometimes a trust is appropriate, even if you don’t have many assets. You will also want to create a healthcare directive and consider a durable power of attorney for financial matters. Also consider adding beneficiaries to accounts if you want to pass along assets to people outside of your will.

Getting your finances organized doesn’t take that much but many people put it off way too long. Don’t wait to get things under control so you can relax in knowing you’re prepared for the future.

Kevin Theissen is the owner of HWC Financial in Ludlow.

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