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Tips to spring clean your financial house

Written on April 1, 2008 at 7:42 pm, by rhonda

The flowers are blooming and the birds are singing – Spring seems to have finally sprung. It’s a great time to start new and clean out those cobwebs hiding within each nook and cranny of our homes. And although our intentions start off good, somehow we always find an excuse to dodge the hefty job of cleaning our ‘financial house’. This is usually the largest and most cluttered areas that we need to sort through.

Here are three simple strategies to help make decluttering and reorganizing your financial papers a less daunting task:

1. Preparation

First we must understand what makes up our ‘financial house; it’s our personal debt, our savings plans, retirement plans, estate plans and insurance needs. Our financial papers should be sorted and filed in these 5 groups.

2. Declutter

Once we have sorted all of our papers into the 5 groups, it is time to go through them and start shredding. The rule of thumb is to keep your last two statements plus your original documents and shred the rest. If you haven’t gone paperless yet, it’s definitely time to do so. Most banks and financial companies offer on-line services.

3. Develop a ongoing process to manage your financial papers

If you do not keep on top of the heaps of incoming papers you’re bound to find yourself surrounded by the same clutter next year. So to avoid this trap, develop a process on how you will manage your ‘financial house’. One woman I know created five folders for each financial group. Once a week she sets aside 15 minutes to briefly review the papers she received that week. If there is nothing that needs to be acted upon, she just files each one away accordingly. And in keeping with the rule of thumb, she keeps only the last two statements. When she has her annual meeting with her financial planner, she brings her five folders so the advisor has a good understanding of all aspects of her financial affairs.

When you are organized, you feel more in control of your life and when it comes to your finances, it’s important to be in control. Not only will you sleep easier at night, you will also be better prepared if something unforeseen should happen. In the coming itsHERmoney newsletters we will discuss the significance that each of these 5 financial groups have to you and your financial wellbeing.
 

  ‘Helping women achieve financial independence’

Rhonda Sherwood, CFP, FMA

Wealth Advisor, ScotiaMcleod

604-661-1532  

www.rhondasherwood.com 

www.itsHERmoney.com