Spring Cleaning for Your Finances

Spring Cleaning for Your Finances

It’s hard to think about spring cleaning while there is still a morning frost on the car windshield. But, the calendar says it’s April, taxes are due next week, Sean and Colin start soccer practice tonight, and the little league baseball opening day parade is Saturday. So, it must be spring, right? Or is that just some more ‘fake news”?

Many times I meet with clients, and they ask me to review the mail they have received since we last met. Financial service companies seem to be good at sending lots of mail: statements, prospectuses, confirmations, statements, disclosures….. I take the time to review the mail, and in many cases people just want to know what to keep and what can be shredded.

How do you know what to keep and what to shred? In an effort to help you tidy-up your financial life, I wanted to forward a timely article from the CFP Board.

Mar 21, 2018

There’s no better way to celebrate the end of tax season and the beginning of warmer weather than Spring cleaning your finances, according to Senior CFP Board Ambassador Jill Schlesinger, CFP®.
While this can be a daunting process, Schlesinger shares a list of best practices to keep in mind when getting your financial house in order on LetsMakeaPlan.org:

  • Shred it & Forget it (After 45 Days): Unless you need to reference a transaction for tax or business purposes, or for proof of purchase for a specific item, you can shred credit card statements after 45 days. But, be sure to hold on to statements you may need for your taxes, such as charitable contributions. Same rule applies for utility and phone bills: once you’ve paid them feel free to shred, unless they contain tax-deductible expenses.
  • Short Term Relationship (About 1 Year): Hold on to bank and investment statements for a year, and be sure to flag any taxable investments. However, hold on to records that are related to home improvements and major purchases until you dispose of the asset. Similarly, you should hold on to medical records for at least a year.
  • Lucky Number 7: Because the IRS has seven years to audit your returns if the agency suspects you made a mistake, it’s recommended to keep your returns, and all supporting documents, for seven years. If you work with a tax preparer, ask whether they will maintain electronic copies of all returns filed.
  • Declutter for the Win: If you have any orphan accounts, consider consolidating them – same for old retirement or investment accounts. Combining accounts streamlines your financial life, makes it easier to monitor your entire portfolio and ensures that your money is properly diversified.


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