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Spring Cleaning for Your Finances
Spring is a great time for getting organized and cleaning things out. That applies to your house, of course, but it also can apply to your finances. The National Credit Union Association has some tips for getting your financial house in order.
Review your credit report. Many people don’t think much about their credit report unless they are trying to get a loan. But if you check your credit report regularly, you can find and resolve potential problems ahead of time. You are entitled to a free copy of your credit report from each of the three main credit reporting agencies – TransUnion, Experian and Equifax – once a year. To get your reports, go to www.annualcreditreport.com. The site also explains what you should look for on the reports and what you should do if you find a mistake.
Organize your documents. Go through the piles of paperwork and decide what you need to keep. There are some things, like your birth certificate and your Social Security card, that you should keep forever in a safe place. You should keep tax returns and any supporting documentation for six years. You can scan other records you want to keep, such as receipts, and dispose of the originals. Just be sure to shred any paper that has important personal information about you, such as your credit card or bank account number, Social Security number, etc.
Organize your financial passwords. Although it is easier to remember a small number of passwords, you should not use the same password for multiple financial sites, such as your bank, investments, credit card accounts, etc. If you do, a hacker who finds your password information for one site would have it for all of them. Instead, set up a unique password for each account. Then write them down and store them in a safe place.
Set up automatic bill payments. If your cash flow is consistent, it is much easier to pay as many of your bills as possible automatically. That lessens the chance that you will forget a payment and be faced with a late charge. If you bank online, you probably can set up automatic payment through that system. Alternatively, you can link a bill to a credit card so that the bill is charged automatically to your card. This might be an option to consider if you have a card that pays you back in some way for the things you charge to the card. However, if you choose to go this route, make sure that you pay your credit card off each month.
Look at your debt situation. Are you still paying off your credit cards from Christmas? Do you have other debt that you could pay off? Consider drawing up a debt repayment plan, paying off your most expensive debt first.