Scrap piece of paper with the word, "Declutter" written on it

Spring Cleaning: Financial Edition

Spring is a time of transition and renewal, from the flowers and trees blooming, to lighter and shorter clothing replacing winter wear, to springing forward for daylight saving time.

Times of transition provide a great opportunity to take inventory of your life, evaluating what you truly need and use and what just takes up space, potentially creating unnecessary stress. Just like you might do this for physical things in your house, why not do the same for your finances? Here’s how to clean your financial house and give yourself a fresh start this spring:

1. Start by reviewing your financial plan, or create one if you haven’t already.

What exactly is a financial plan? A good financial plan includes a list of things you want to save and invest for—an emergency fund, a house, college fund, retirement—and the timeline for each. If you have any investments, check in on them to see how they’re doing and make any necessary adjustments. 

Got investment questions? Check out these investing basics by the U.S. Securities and Exchange Commission.

2. Review and adjust your budget as necessary.

With a new or updated financial plan in place, check in on your current budget. Do you need to make any adjustments given your income and savings goals? If you need help creating your budget, check out these five simple steps to constructing one.

3. Clean out the physical financial clutter. 

Now that you have your plans and budget in order, move on to sorting through financial documents. Here’s how long you should hold on to different documents, depending on the type:

One month, or at the end of a billing cycle: ATM receipts and other receipts (unless it’s a high-ticket item, such as a computer, television, etc., or you need the receipt for a rebate or warranty); information about investments you might be considering.

One year, or after you’ve filed your taxes: bank statements; brokerage statements; phone, cable, and Internet statements (unless you’re deducting them for work or home office-related expenses); credit card bills; pay stubs; Social Security statements; utility bills. 

Seven years, or when you know you no longer need them for tax purposes: child-care records, flexible-spending account documentation, 401(k) and retirement plan year-end statements, IRA contributions, purchase records for investments, records of charitable donations, records on houses you’ve sold, tax returns with back up documentation.

Keep as long as you own the asset: insurance policies, receipts for important purchases (technology, art, antiques, jewelry), receipts for renovations or investments made on your home or property, titles, warranties.

Keep forever: birth certificates, social security card, deeds, citizenship papers, military records, wills.

This can seem like a lot to keep track of, so make it easier on yourself and develop a filing system where all important documents are in one place. There’s one exception. Documents in the “keep forever” category, as those should be stored somewhere secure like a safe-deposit box. Examples of categories include:

4. Create accountability for yourself by taking the America Saves Pledge

Set a goal and make a plan to save. Savers with a plan are twice as likely to save successfully! Already taken the pledge? Military Saves encourages you to recommit to your savings goal and re-pledge today.

So, what are you waiting for? Pledge to save money, reduce debt, and build wealth today!

Consider doing a spring cleaning of your finances. Here's how: @MilitarySaves

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