Your closets are clean, your garage is organized, and your baseboards are sparkling—so what now? Before starting your next Netflix binge, check out our financial spring cleaning tips to get your personal finances and budget in tip-top shape. Now is the perfect time to get started!
1. Make a List
You didn’t Marie Kondo your entire house last week on a whim. You made a plan, maybe even wrote it out, and then followed it. When it comes to financial spring cleaning, the same rule applies. Start by noting areas where your finances could use the most TLC, and then prioritize:
- Is your desk overflowing with pay stubs and old credit card statements?
- Do you keep tripping over that box of receipts and insurance paperwork?
- Did your credit score suffered because you forgot to make your credit card payment on time?
Regardless of what your financial clutter looks like, it’s time to clean it up. Starting out with a manageable plan in place will make spring cleaning your finances go by quickly.
2. Get Organized
Before you start shredding, burning, or tossing—organize your financial clutter into piles. Your specific stacks will vary, but will fall into some of the following categories:
- Tax documents
- Pay stubs
- Credit card statements
- Bank account statements
- Insurance documents
- Utility bills
- Auto and mortgage loan documents
- Canceled checks
- Retirement account documents
- Tax returns
Ideally, you’ll want to tackle this part of your financial spring cleaning in a room you don’t use often and that has a door. If the process becomes overwhelming, you can walk away and take a break. This separation will also help keep smaller kids and pets from derailing your progress.
Are most of your documents digital? Create a folder (or space in the cloud) to stack everything for easy access as you sort and delete what you no longer need.
3. Get a Scanner and Shredder
If you don’t already own one, get a scanner and a shredder. Think of it as an investment in your peace of mind and personal security. Storing paper, no matter how well-organized, can make your mind (and your space) feel cluttered. Today, most of your documents can be saved digitally, making clean up safe and easy.
4. Know What’s Safe to Shred
Shredding old credit card statements and bills can be surprisingly enjoyable. But before getting too shred-happy, make sure you understand what can go and what you should save. The Financial Industry Regulatory Authority (FINRA) has a great rundown of what financial documents you should keep and for how long.
Here’s your timeframe:
- Tax documents and tax return receipts: 7 years
- Property documents: 6 years after you sell your home
- Loan documents: Until it is paid off
- Bank records: 1 year
- Paycheck stubs: 1 year
- Credit card statements: 7 years
- Other bills: As soon as you pay
5. Scan First, Shred Second!
While there’s something to be said about holding onto original copies of important documents, there’s also something to be said about the headache and stress of misplacing them. We recommend scanning all the financial paperwork you don’t shred, and some of the paperwork you do.
Remember: once you feed that document through the shredder, there’s no going back. Having a scanned copy is a nice reassurance just in case.
6. Create a Digital Filing System
Now that you have digital copies of your most important financial documents, it’s time to get organized. Start with a folder and build out sub-folders of dates and categories. Spending a few hours tackling this now will save you down the road.
7. Save Back-Up Copies
Whether you prefer cloud-based storage options or physical storage solutions like a flash drive, save a back-up copy of your records. If your computer crashes, something unexpected happens, or you need to turn over financial information to your CPA—this is an easy and quick way to recover and share documents without any last-minute work.
Do yourself a favor and save back-up copies after you organize files on your computer. The folders and subfolders should remain intact when you transfer them to a second storage space, eliminating the potential of duplicate work.
8. Designate a Place for Important Papers
Find a good spot to store important paperwork and keep it organized. A file drawer tucked away in a closet or home office might be a good option. If you don’t have a dry, secure place to keep these items, consider getting a safety deposit box at your bank.
9. Keep and File Receipts
While this tip might seem counterproductive but keeping and filing receipts is an important part of staying financially organized. For smaller purchases, hold on to the receipt long enough to check it against your bank statement or credit card statement. For larger purchases, file the receipt somewhere safe.
If the thought of cluttering your space with tiny pieces of glossy-white paper is too much, check out this list of receipt management apps. These mobile applications allow users to scan copies of paper receipts and file them into spending categories.
Some receipt scanning apps will even give you points you can redeem for cashback. Bet you didn’t think financial spring cleaning could lead to extra spending cash. Cha-Ching!
10. Set a Bill Pay Schedule
In the world of instant gratification and automation, it can be tempting to pay bills as soon as they come in. But when you have different bills being deducted from your checking account on random dates throughout the month, it can be a strain on your budget and stress levels.
Make a list of monthly recurring bills and when they’re due. If the dates are all over the place, you may benefit from adjusting your payment due dates. When your bills are all due around the same time each month, it’s easier to keep track, make on-time payments, and correlate your budget.
11. Go Paperless
Once your recurring bills have been reigned in and assigned manageable dates, consider going paperless. Many credit card and utility companies offer paperless discounts, which can add up to a lot of savings over time. Be sure to adjust your notification settings to get text or email alerts when an upcoming bill is due, so you don’t accidentally forget to pay it (those late fees and interest rate charges add up, too!).
12. Set Financial Goals
Want to vacation in the Maldives next year? Eager to pay off your car so you can stop paying so much in interest? Want to go back to school and shift careers? Or maybe you want to stop living paycheck to paycheck and save money.
Whether large or small, setting and working toward financial goals will help motivate you to stay financially organized and budget-conscious.
13. Reassess and Refresh Your Budget
If you haven’t spent time budgeting or refreshing your budget, now is the time to do it. It may not be glamorous or exciting, but keeping up with your personal budget is essential to maintaining your financial wellbeing.
It’s also an important component to reaching the financial goals you just set for yourself.
14. Shop Around for New Accounts
This particular financial spring cleaning tip is one that you should get in the habit of doing a couple of times each year. Research current credit card rates online, ask local banks if they have any promotions for opening a new checking or savings account, and shop around for cheaper insurance policies. Look for ways you can cut back beyond your interest rate as well. Switch to a credit card that doesn't charge an annual fee. Look for a bank that gives you a bonus for direct deposit. Look for lenders who offer extras like identity theft protection and credit monitoring through one of the major credit bureaus.
Even if you end up keeping the accounts you have, annually researching and staying aware of alternative options is a good financial habit to form.
15. Keep Up With It
To make the most of spring cleaning your finances, keep up with it! Use the systems you spent hours putting in place and stay on top of filing important documents in their appropriate places. Regularly review credit card issuers and lenders to see if you could earn extra money by switching to accounts that earn you extra cash through rewards.
Scan your receipts as soon as you make a purchase, save back-up copies of your bills and statements as soon as you receive them, and vow to never return to the financial clutter you worked so hard to clear.
When you pair your home spring cleaning with a bit of financial decluttering and reorganizing—you’ll be ready to tackle the rest of the year with confidence.