Do you know that feeling when you finally clean out a closet, toss basement-dwelling boxes, or organize a messy attic? Phew! It’s done. Ridding yourself of clutter is time consuming, sometimes stressful, and often just a pain in general. But in the end, it’s almost always well worth the effort.  

Decluttering your financial life can be equally freeing. Over the years, people’s finances tend to get scattered and disorganized, spanning a multitude of banks, loan companies, investment firms, and other financial institutions. Keeping tabs on all those accounts can become overwhelming, causing people to lose focus entirely. The feeling that money matters are simply too complicated is quite common. How can you have a solid grasp on where you stand financially if you can’t even keep track?

If you are ready to take charge of your financial life, try these decluttering steps:

Step 1: Figure out where your money is stashed. Pull together your monthly statements from banks, investment advisory firms, annuity companies, life insurance companies, credit card companies, mortgages, student loan organizations, and any other financial institution where you have an account. If you haven’t received a statement lately, hop on the phone with customer service. Confirm your contact information is up to date and request a current statement.

Step 2: Consider consolidating retirement accounts. Old retirement accounts are a common accumulator, typically with job changes over the years. New employer? A new retirement account often follows suit. The old ones are sometimes left behind at whichever financial institutions were responsible for your previous 401k. Decide if you would like to combine any old accounts into a rollover IRA, your new 401k, or even leave them where they are. Make sure you follow the instructions for either combining with your new 401k or rolling into a rollover IRA to avoid possible taxes, fees or penalties. Reach out if you have questions.

Step 3: Close out old credit cards. Credit cards are known to pile up too, especially ones for specific retailers. While you may have gotten instant rewards for opening lines of credit, decide whether you need the cards now. If not, pay them off and close the line of credit with the company. Simplify, simplify, simplify.

Step 4: Tackle the financial paperwork mountains. We’re talking insurance policies, loan documents, financial records, and tax returns. You need to hang on to your old tax returns for quite some time for auditing purposes. Insurance policies, while sizeable, are good to have on hand too. Stash these important documents away on paper if you’re old school or in digital format so they are easily accessible without taking up valuable space in your home office.

Step 5: Refresh your legal and/or estate documents. This one is arguably the most important and often most neglected task on the financial tidy up list. People usually don’t like to think about end of life, much less organize for when it inevitably happens. Try to change your thinking on this one. Look at legal documents as more of a wish list, a way for your beneficiaries to carry out your final aspirations and button things up.

Step 6: Get a financial plan. Now that you have a solid grasp on your money situation, chart a productive path forward with a financial plan. Financial plans are an excellent tool for diving into your net worth, income streams, debts, investment portfolio, and most importantly, your goals for the future. Our planning process is simple, leaving our clients well-informed and prepared to move forward with renewed financial confidence. Want to learn more? Don’t hesitate to reach out.