Spring is in the air—an opportunity for many to work on their spring cleaning projects. Clean out closets, do minor or major repairs around the house, spruce up the yard and get it in tip top shape for backyard fun! And with this season SPRINGing you into action to clean and organize, why not take the time to clean up and organize your financial house too?
Spring is all about new beginnings, making changes, and getting on track. And with just finishing tax season, this is the perfect time to organize your important documents, review outstanding debt, and get into a position to plant a fantastic financial plan that will blossom for years to come. Use the following steps:
Step 1: Box or shred documents from 2017.
It is recommended that you keep documents for seven years. Be sure to place 2017 documents in a large envelope or box and mark it “2017.” Documents that should be saved include: Federal and state tax returns, property tax bills, mortgage-related documents, earned interest forms from bank accounts, capital gains statements, and any credit card statements or receipts that were used as expenses on tax returns.
Step 2: Create an organized filing system for documents.
With tax season behind you, this is the perfect time to start an organized filing system. Documents can be organized in a filing cabinet using hanging folders, a filing box with hanging folders, or even an accordion file. Simply label each folder by account. For example, Mortgage/Rent; Electricity/Gas; Cell Phone; Water; Credit Cards; Medical Bills; Bank Statements; Paycheck Stubs; Auto Loan; Insurance, etc. Have a separate folder for each and every account. If you receive statements online, simply create individual separate folders in your inbox, then print and file the statements away monthly.
Having an organized filing system allows you to easily access documents when needed. You can also use the documents to prepare a budget and identify areas where expenses could be cut, debts paid down (and eventually eliminated) and savings built.
Step 3: Review credit card and student loan debt statements.
If you carry a balance on credit cards or have student loan debt, take the time to gather the monthly statements and document the total outstanding debt. Items to note include:
-Creditor Account
-Balance
-Minimum Payment
-Actual Payment
-Interest rate
Knowing the above information will help you prepare a plan to pay off debt efficiently.
Step 4: Determine if spring is a time to refinance or purchase a home.
Home prices in the Bay Area have risen over the last few years which has resulted in increased equity positions for homeowners. With interest rates still at historically low levels, now may be the perfect time to access the equity in your home and do home improvements, lock-in a fixed rate loan (if you currently have an adjustable rate mortgage), or purchase a home for the first time, to start building your equity now.
Spring offers so many great opportunities to improve your financial health. A healthy tax return can provide funds for a down payment, funds to pay off debt, or funds to build a savings account. Regardless of your goal, use this time of year to determine your unique financial path.
Jodee Brydges has been in the financial industry for over 25 years. She is an Industry Speaker and loan officer with RPM Mortgage in Alamo. She is passionate about helping clients achieve their dream of home ownership and educating individuals nationally/ locally on a variety of financial literacy topics. She is the author of the upcoming book “Digging Out” (Summer 2018). For questions or comments, you can reach Jodee at jbrydges@rpm-mtg.com or 925-552-3863.
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