Most people use the summer months as a time to relax and rejuvenate – often with the intention to forget about any financial burdens or stress from the year. However, in the midst of sunbathing, summer can be the ideal time to organize your finances and make sure you have a clear picture of your financial situation – including all your investments, debts and savings.
Here are three useful tips for getting your finances in order this summer:
- Purge your files and go paperless. Year after year, paper banking and retirement statements can pile up in your house. As you sort through your piles, remember that documents older than two years should be discarded (preferably shredded). And, to avoid developing a future stack of papers, consider making all your accounts paperless and signing up for electronic statements and bills. If you are diligent about checking your email and online accounts, you’ll feel more organized about your finances without having hundreds of financial documents around your home.
- Save essential documents. While it may be tempting to discard all your paper documents, there are some essential statements you should keep on file. For example, you should always keep tax returns and year-end investments; active deeds and policies; receipts for big-tickets items; and other highly important and confidential items such as passports, marriage license or passports. In general, any document that represents proof of ownership or large payments should be saved for your records.
- Communicate about finances. If you’re married or share your finances with a loved one, it’s important to make sure you both are organized and on the same page. Use the down time of the summer to discuss your expenses, spending and financial goals. Discussing your current finances will allow you to make critical decisions needed to benefit your financial future and adequately plan for future expenses.
By making your finances a priority this summer, you’ll feel more empowered to make necessary financial changes and adjustments for the future regarding your retirement accounts, tax planning and estate planning, among others.