The end of 2016 is quickly approaching and a new year is on the way. A good project to complete before you dive into 2017 is to organize your finances. Although the thought of tackling your many financial accounts and records may seem overwhelming, it is only a matter of following a couple simple steps to start the new year in organized bliss.
Take Stock of What You Have
It’s time to make some lists. Start by writing down everything that either brings you income or sends you a bill or statement, which may include retirement accounts, checking accounts, credit cards, savings accounts, insurance policies, utilities, your mortgage bank or landlord, and so on.
One by one, go through the list. Collect paperwork you’ve saved related to it, and figure out if you have an online account associated with it. (If you don’t, you can probably create one.)
Which brings us to our next step:
Use Online Tools
Even the most organized among us struggle to keep the many aspects of personal finance straight, from monthly bill due dates to credit score updates and everything in between. But thanks to the Internet, you don’t have to do it all yourself.
When you log into your online accounts, you’ll probably be able to find some options for setting email or text notifications whenever you have a bill due or have a paycheck coming in. You can also do it yourself and make note of important dates using a paper or digital calendar.
There are dozens of budgeting apps that allow users to view all their financial accounts and bills in a single dashboard. If you’d prefer to keep things separate but still need a little help keeping track of things, you may want to look into a password-storage app. Remember, it’s important to use hard-to-guess passwords and not use the same credentials across multiple accounts.
You may be pleasantly surprised by all the tools you have at your disposal through your existing accounts, as well. For example, you may have some perks like purchase protection or travel insurance through your credit card company. Many are offering account holders free credit alerts — like when a new account shows up on your credit report — while others provide their customers with FICO credit scores on their regular account statements.
Such tools are common, so take some time to explore the advantages you might already have.
Ditch the Paper
Now that you’ve gathered all that paperwork, you have a few things you can do with it: Save it for your records, dispose of it, or make sure you don’t get any more.
Among the many settings you’ve probably already come across in your online account exploration is the “going paperless” option. Ask yourself: Do I need this piece of paper every month? Some people like to use paper to keep themselves organized, but paper also gets you to the point you’re at now — needing to de-clutter. It might be time to say goodbye to regular mail from your bank.
As far as record-keeping goes, the IRS recommends you keep all documentation for your tax returns for a minimum of three full years in addition to the current year. Anything older than that can be scanned and kept on a drive, as can any records pertaining to any time you might have been a victim of identity theft.
Anything you don’t want to keep should go through a cross-cut shredder as opposed to a strip shredder. Cross-cut shredders cut your papers into numerous short, thin strips so your documents cannot be reconstructed.
According to the Federal Trade Commission (FTC), there were more than 3 million identity theft and fraud complaints in 2015, up from 2.5 million in 2014. All this means is that it is especially important to protect your identity and take extra precautions. You don’t want personally identifiable information — your name, address, birthdate, Social Security number, bank account numbers, etc. — getting into someone else’s hands.
Review Your Current Strategy
Now that you’ve gotten a sense of your personal-finance details, it’s time to think big-picture. Look for redundancies in your insurance coverage and do some math to figure out if you’re saving enough. Take the time to understand your paycheck — you’ll want to know exactly what’s coming out of it and which of those things might need adjustments — so you can feel confident in your short- and long-term budget and, hopefully, keep things a little simpler than they were when you started this project.
Christine DiGangi is a reporter and the social media editor for Credit.com, covering a variety of personal finance topics. Her writing has been featured on USA Today, MSN, Yahoo! Finance and The New York Times International Weekly, among other outlets. You can find her on Twitter @writingbikes.