Out with the old, in with the new. Spring is the perfect time to dig in and organize your financial life.  When your financial files are in working order, not only will you feel better about your finances, but it will make the rest of the year easier to manage and maintain. Here’s how to spring clean your finances:
Start with your taxes.  The first step to an annual organization of your finances should be to complete and file your taxes.  Time is slipping away, and the sooner you file your taxes the better.  You must get organized to file your taxes, whether you’re completing them on your own or using a professional. This step of gathering your financial files from the previous year is the perfect beginning to an overall organizational push. Once your taxes are filed you should have almost everything ready to put away.
Run your annual free credit report. The second step is to run your credit report. Everyone is entitled to one free credit report from all three agencies per year. It is important to review your credit report for any errors or inaccuracies. If you’re all clear then move on to the next step. If you find problems you can immediately pull any supporting evidence from your files to back up your claims.
Gather the past year’s financial files. Step three entails gathering all the paperwork you’ve saved from the prior year. This includes but is not limited to: bank statements, credit card statements, investment reports, and utility bills. If these are not already in their own folders, it’s time to create them. Dedicate a file folder for each statement or bill type and label them with the name of the account and year. For example: Checking Statements – 2008 or Department of Water & Power Bills – 2008. Once you have everything together be sure to create a new folder for the coming 2009 documents.
File the past year away. The last step is to take all the files you created and gathered above and put them in longer-term storage. The easiest way is to section off a bit of an out-of-the-way drawer or box. If you don’t have dedicated filing space, filing boxes are cheap at any office supply store and can be stashed in a closet or basement. Clearly mark any box with the year of the contents within.
Following this system will create easy to access yearly files in one central location. If you’ve accurately filed your taxes and run your credit reports every year without error, you only need to keep these documents for three to five years.   Once you’ve amassed five years, when you add to the pile take the oldest year and get them to a shredder. Follow these steps and you will be left with an organized filing system with room to fill for the current year.
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