While spring cleaning a home is important, spring is also a great season to take time to clean up your financial life. After filing your taxes, it is likely that you know where the majority of your financial documents are located. This will give you a head start on organizing these documents which will make it easier for you to clean up your files and improve your financial life.
Many people keep financial documents that they simply do not need. Once a new utility bill is paid, the old bill can be tossed. Receipts for everyday purchases can also be thrown away after receiving your bank or credit card statement showing the correct amount. If the receipt represents a deductible expense, create a filing system to keep the receipts secure and organized until tax time. As electronic bank statements are becoming increasingly common, keeping paper statements is not necessary.
Completed tax returns and associated documents should be kept for at least seven years. Combining each year’s documents into a large envelope can help a person to keep track of the records and makes them easy to store. Be certain to keep records of tax payments as well. Letters and proof of payments proving that a debt has been paid in full should be kept permanently in case the documentation is needed in the future.
Learn From It
Looking over your bank records and other financial documents should give you some ideas for saving money. You might have been surprised how much money you were spending on online auctions or in your local convenience store. No matter where you think you were overspending, learn from these mistakes so you can do better at saving money this year.
If you find that you are paying for services that you do not need, it is time to cancel them and start saving money. For example, going to a gym is a good idea to improve your health, but paying for a membership that you do not use is just a waste of money. You should also take the time to reassess your retirement and other long term savings plans as well as your insurance needs.