4 Key Benefits of Financial Spring Cleaning
It’s springtime, and for many of us, that signals an annual tradition – Spring Cleaning. Besides the sense of accomplishment, sparkling countertops, and dust-free bookshelves, spring cleaning can have other benefits. For example, some experts believe getting rid of excess clutter can reduce stress.
But beyond giving your home a good once over, this is also a great time of year to consider financial accounts and conduct a little financial spring cleaning on your finances.
Financial Spring Cleaning
Simply being organized can help reduce stress.
“When we have chaotic surroundings or a fragmented mindset, the brain can perceive this as a sign that there is more demand for energy than our current capacity, which triggers the stress response,” according to Heidi Hanna, Ph.D. and CEO of Synergy and author of Stressaholic and The SHARP Solution in an article on the Huffington Post.
Managing finances is one of the most stressful things many people do (or avoid). If you reduce clutter and know where to find your important documents, you’ll breathe easier. In addition to reducing stress, organizing your financial life can help in other ways:
- Reduce the risk of fraud or identity theft;
- Help you save for college or a summer vacation;
- Improve your credit score; or
- Improve your closest relationships.
Reduce the risk of fraud or identity theft
How many of us have old bank and credit card statements, receipts, tax records and bills dating back years? When you finally do decide to get rid of the piles of paper, do you just throw them in the trash? Maybe you just rip them in half once or twice.
Identity thieves love to see statements and tax records with account numbers and other sensitive personal information. It’s easy to retrieve those from the trash. Instead, determine how long you need to keep certain documents.
- You can find articles about document retention at many sites, including Consumer Reports, USA Today (keep / toss), Kiplinger, or the consumer arm of the National Credit Union Administration.
Once you’ve determined which documents to keep and which to discard, destroy your documents using an inexpensive cross-cut shredder. If you don’t have one, check with Nuvision, which periodically holds shredding events for the community.
If you need old credit card or bank account information, you can always access two years of past statements through Nuvision online banking. In fact, choose the paper-free option to avoid another pileup in the future.
When you don’t have documents lying around in your home or in the trash with sensitive personal and financial information, you will reduce your risk of fraud and identity theft.
Help you save for college or a summer vacation
It’s hard to save for college, a summer vacation or retirement when you’re trying to pay off debt. If you used your credit cards over the holidays, make a plan today to pay it off.
According to MyCreditUnion.gov, “Spring is a good time to look at your total outstanding debts and see which loans or credit cards you could pay off entirely this year. At the very least, put yourself on a stricter debt payoff plan, and pay off any debt you accumulated over the holidays. Cleaning up this debt quickly can put you in a much better financial position for the rest of the year.”
Additionally, most of us have some combination of utility bills, cable or satellite TV bills, landline phone bills, mobile phone bills, magazine subscriptions, streaming TV services, movie channels, internet, and more. Do you pay your bills by writing a check? Do you ever miss a payment because you lose a bill in the paper pile and incur a late fee?
Set up mobile bill payment through Nuvision’s online banking to reduce the chance that you’ll miss a payment, and check to see if you can receive an online statement and go paper-free.
Getting organized, paying off debt, and making payments on time will help you find a little extra money to save.
Correct your credit score
Review your credit report. Your credit score can determine whether you qualify for a loan and what rate you’ll pay. If your credit report has inaccurate information, you can fix it.
The law entitles you to receive a free credit report from each of the credit reporting agencies – Experian, TransUnion, and Equifax – once every 12 months.
- To request your free credit report, go to www.annualcreditreport.com/index.action.
- You can also print and fill out an annual credit request form at www.consumer.ftc.gov/articles/pdf-0093-annual-report-request-form.pdf, and mail it to the listed address.
If you find an error, you can dispute the information or request that the information be deleted or corrected.
Improve relationships with family and friends
Improving your closest relationships isn’t a financial benefit, per se. However, the results from the Gallup-Healthways Well-Being Index survey released in December 2015 revealed that, “Almost nine in 10 Americans who are thriving in their financial well-being agree that their relationship with their spouse, partner or closest friend is stronger than ever. But this drops to six in 10 among those who are suffering in financial well-being.”
So, if doing a little financial spring cleaning can help reduce stress, reduce the risk of fraud, and help reduce debt or save for college, a vacation, or retirement, then it might also improve your closest relationships. Who doesn’t want that?
Tidy Up Your Digital Life
Get rid of unused apps and computer programs.
In a survey conducted in October 2017 by Rasmussen Reports, 41 percent of respondents said they have been a victim of a major data breach and 42 percent said they have had their credit card or debit card information stolen.
The fitness and diet app MyFitnessPal just revealed a data breach in which hackers accessed as many as 150 million user names, email addresses and passwords. Uninstalling the app wouldn’t remove user information that’s already stored on server, but deleting a dormant account would render it unusable if someone tried to use your stolen username and password to log in.
If you haven’t used an app on your phone or tablet in six months, that’s a good sign you can remove it. Make sure you operating system and your software on your mobile devices and computer is current. If you haven’t done so in a while, visit the Apple App Store on your iPhone or iPad, or Google Play on your android device and choose update.
- You can find other suggestions for digital spring cleaning at the Better Business Bureau.
Moreover, while most of us recognize the steps we should take to increase cybersafety, the Pew Research Center reported last year that “many Americans fail to follow cybersecurity best practices in their own digital lives.”
According to Pew’s “Americans and Cybersecurity” survey, most Americans keep track of their online passwords by memorizing them (86 percent) or writing them down (49 percent). Only 12 percent use a password management program.
- You can read about digital password management services in Nuvision’s 5 Steps to Create Strong, Unique and Readily Accessible Passwords.
Once you’ve removed apps you no longer need or use, you should review the permissions for the remaining apps. You may feel that they don’t need access to your contacts, your location, or your microphone.
- Tech reporter Rich Demuro just aired a segment on KTLA 5 about how to check your phone settings to make sure apps aren't collecting unnecessary information.
Make A Plan
Russian author Leo Tolstoy once wrote, “Spring is the time of plans and projects.”
However, you don’t need to do everything at once. For some people, financial and digital spring cleaning could take hours, or even the better part of a day. Than can seem overwhelming, and besides, who has that much time?
Don’t stress. Make a plan. Get your schedule and set aside 30 minutes to an hour once or twice a week for the next month. Do it. Go to your computer, get on your phone, or pull out your planner or family calendar and create a new event, make an appointment, or write it down. Be specific. For each appointment, designate your task:
- Financial spring cleaning – sort mortgage, auto, consumer loan documents and old tax records;
- Financial spring cleaning – check credit report and organize bills;
- Financial spring cleaning – organize all banking (checking, savings) and credit card statements; and
- Digital spring cleaning – review, delete, or adjust permissions for apps on phones
That’s it. You don’t have to take on the entire task at once (unless you want to). Make a plan and follow through. Happy spring cleaning.
To stay on top of Nuvision alerts and information related to the risks of fraud and identity theft, financial and data protection, and cybersecurity, check our Fraud Protection blog or follow Nuvision on Facebook and Twitter to receive updates when new articles are published.