Spring Clean Your Finances: 5 Tips From Money Pros

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Spring Clean Your Finances: 5 Tips From Money Pros

Spring is almost here, and those seasonal cleaning duties—sweeping the garage, clearing out the gutters, washing the windows—are probably nagging at you.But if you’re like many Americans, it’s more important to focus on spring cleaning your finances this year.

Money Spring Cleaning Tip #1: Get Everyone on the Same Page

Monica Kaden, an accredited senior appraiser and principal at Fischer Barr & Wissinger, LLC, says that spring cleaning needs to start with dividing up the workload. “Typically, in a couple or a family, there’s one person who handles the household finances,” she says. Her advice is to have the other spouse—and even older children—sit down with the person who handles the bills, budget, and important financial documents, so that multiple people are knowledgeable about the household’s finances.
This way, family members can bounce ideas off of each other for reducing spending and finding room in the budget for more savings. Kaden suggests making a checklist of the family’s finances—including the budget, bank and investment accounts, where important documents are stashed, and a balance sheet—that everyone can reference, and then figure out who will take care of each task. Even teenagers can help by managing their own checking accounts or researching college loans.

Money Spring Cleaning Tip #2: Take Inventory of Your Possessions

Getting organized is half the battle when it comes to spring cleaning. If your home was to succumb to a fire, earthquake, flood or other catastrophic event, would you be able to account for everything—including how much you paid for the big-screen TV and your favorite leather armchair—so your insurance company could properly reimburse you?
“Insurance companies try as hard as possible to pay out the least possible,” Rachel Sanborn, a certified financial planner at LearnVest Planning Services, says. So it’s important to keep a record of the items in your home—particularly the most expensive ones—including photos of the items and their receipts.
Some websites offer online checklists to help guide you in creating your inventory. Sanborn even found an iPhone app—Know Your Stuff—for tackling this task. Added tip: Be sure to store a copy of your final inventory in a spot that’s readily accessible outside your home, like an online Google Doc.

Money Spring Cleaning Tip #3: Reduce Financial Clutter

“You have to clean up your financial past (debt), while trying to live in the present moment (managing cash flow) and planning for the future simultaneously,” says Julie Murphy Casserly, a CFP® based in Chicago. For those whose plans for financial spring cleaning include paying off debt, Casserly says that they need to first address the issues that created the debt in the first place—and that means dealing with the emotions that surround money.
“People need to find a compelling reason to change; it has to be tied to some dream or goal that’s different from their current reality,” Casserly advises. Think concrete goals, such as “I want to pay off one of my debts, so that I can save for a trip to Bora Bora” or “I want to pay off two of my debts to see my credit score increase.” You can start by setting up an automatic debt payment that comes out of your account each month. If you put it on autopilot, Casserly says, you can’t find another way to spend it.

Money Spring Cleaning Tip #4: Get Shredding

Mike Falco, a CPA in Pennsylvania, says that now is the time to shred any old financial documents. A good rule of thumb: Keep tax records for seven years, pay stubs and bank statements for a year, and credit card statements for at least 45 days. 
Keeping in line with Falco’s “out with the old” mindset, also take a look at your beneficiary forms—which designate who will receive your assets if something happens to you—and update them, if necessary. Beneficiary forms are legal documents that will stand up against a will, so make sure that the person on those forms is the one who you’d want to have your assets.

Money Spring Cleaning Tip #5: Rethink Your Insurance

It’s easy to buy an insurance policy—or accept your company’s—and then just let it gather dust … a spring cleaning no-no! But Sanborn says that reviewing your various insurance policies is a great way to free up money for future goals.
If you have an emergency fund—and you should!—you can consider increasing your deductible (the money you would have to pay before your insurance kicks in), which will bring down your insurance premium (the amount you pay every month). “Emergency funds are intended to cover things like deductibles,” she says.
Additionally, if you have children, and you have a separate policy from your spouse, you should make sure that the kids are on the plan with the lowest premium. Beyond these tweaks, however, Sanborn recommends that you leave your insurance coverage alone: “It’s better to have more coverage than you need.”



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To learn more about this information:
http://www.learnvest.com/2013/03/spring-clean-your-finances-5-tips-from-money-pros/

THE RECOVERY – A NEW REALITY?

So, two “WHEN” questions: WHEN am I going to get a REAL rate on my certificate, and WHEN will the economy around here get back to normal?  The UN-clever and UN-funny answer we need to consider is that for practical considerations, this is the new Reality.

I have to consider things like this when planning for the credit union and reluctantly, I’m forced to look at things in Michigan, the nation and the effects of the current international economic situation. Though the unemployment rate in Michigan is easing. The Euro market is teetering (technical term) and may face the loss of some members. The 10-year T-Bill is at historical lows; currently around 1.5%, with possibilities of going lower and few expectations of going materially higher. The relative magic of the 10-year T-Bill is that mortgage loan rates are generally tied to it and it is telling us, “Stop worrying about inflation for the next five to ten years.”  Ergo, nothing is going up for at least five years, if not longer.

Kind of a downer, especially for us Boomers dependent upon savings rates, but there are some rays-of-light and positive perspectives to consider. First, we are actually in a recovery. Not an exciting one but things are going in the right direction, albeit slowly. Second, things around here are relatively stable and that’s good because you should be able to make some decisions to help you optimize the circumstances instead of waiting for a complete collapse.

I hate saying this, but you should be looking to pay down or payoff your borrowings. Yes, at the credit union, but look at the other loans you have at that “other place” and see if the credit union can get you a better rate. We refinance vehicles, mortgages and personal loans. Are you paying fees on your checking account? You should be talking to our branch staff to see if you can close that second checking account at the “other place” and take advantage of Sterling Van Dyke Credit Union's CORE relationship advantages that not only provide you with free services, but interest rate bumps on loans and certificates too. You should consider moving some of your extra money back into certificates to get any type of rate advantage. Many members have let maturing certificate drop into their regular savings or money market account. Even if it is only a five or ten basis point advantage, why wouldn’t you grab it? Get your CORE account bump. Consider longer and multiple terms on your certificates and “laddering” multiple certificates maturities to increase the overall yield while preserving liquidity. Remember to keep a six month cushion in liquidity for tires, insurance and the little emergencies. Consider letting our Financial Advisor look at your longer term alternatives.

We have a ways to go, but remember that you belong to a NOT-FOR-PROFIT credit union that is established for the benefit of its members – not a bank where the goal is to maximize how much they can get out of you. Take advantage of every opportunity your credit union offers. We’re with you for life, and all its realities.

http://www.greatbasin.org/blog/?p=432

Blog By: Sterling Van Dyke Credit Union