Here's a little financial Apartment Therapy to get you going this spring. You've probably already started thinking about switching out your closet for the new season, tackling the boxes looming in your garage or dealing with the "junk" drawer in the kitchen that's become far too full.
But in your spring cleaning craze you may have forgotten one of the most essential ways to "de-clutter your life: Simplifying your finances. This can save you tons of time and effort --- and, of course, money -- in the coming years.
Ick, you might be thinking -- I don't have time to deal with stacks of account statements, old retirement accounts, and credit cards I barely ever use anyway. But it can be quick and pretty painless to de-clutter your finances. Follow these five steps, and you'll be on your way to a simplified financial life in no time.
1. Consolidate your retirement accounts
If you're like many American workers, you may have one or more 401ks or 403bs left behind with old employers. These can be a time-drain when you have to manage and track each of the accounts separately. To fix that, consider transferring (called "rolling over") these accounts into an Individual Retirement Account (IRA). You'll save time and get better investment choices (most company 401ks have limited choices). A rollover may also help you save more for retirement by reducing plan fees over the coming years. To learn more about a 401k rollover to an IRA, and to compare options, check out where I work at www.IRAmarket.com.
2. Simplify your bills
Many companies allow you set up automatic payments for everything from your cell phone to electricity to cable bills. If you haven't already arranged to do this, do it now. This way, you to never have to worry about paying your bills again, and you avoid those pricey late fees. (Of course, if these automatic payments all go onto your credit card, just be sure to pay that off in full each month.) Once you've done that, consider asking the companies to stop sending you paper statements. This will reduce the clutter in your house, and you can always just look at your account online if you have any concerns.
3. Find the right credit card(s)
Look in your wallet. Do you have multiple credit cards, some of which you barely ever use? If so, it might be time to ditch your unwanted cards. Don't cancel them, as this can ding your credit score; instead just cut them up and never use them, unless they have an annual fee, in which case it's worth it to cancel them. Once you do that, consider whether the cards you do have are the best ones for you. If you never carry a balance on your card, do you have a rewards with good cash back perks (some cards give up to 5% cash-back on certain categories of items) or travel rewards? If you carry a balance, do you have a relatively low-interest rate card? To find the right card for you, check out NerdWallet.com. There you can answer questions about your spending habits, and the site recommends the best cards for you.
4. Sell your old gift cards
If dear old Aunt Sally always gives you a Talbots gift card for the holidays but you're more of a J. Crew kind of woman, why not earn some money for those unwanted gift cards just taking up space (and making a mess of!) your wallet? To do it, check out PlasticJungle.com, where you can hawk your gift cards for cash.
5. Automate your monthly savings
Most of us know we're supposed to save for retirement and for emergencies. Advisors recommend about six months of income for an "emergency fund." But while our employers make it easy for us to save for retirement by automatically diverting part of our paychecks into our 401ks, most of us struggle with how to regularly save for all the other stuff we want. That's why it's essential to "make it automatic." If you get direct deposit from your employer, go online to your bank account and set up a repeating transfer to move a certain amount of each check into savings on the day after the money hits your account. This way, you'll never forget to save again. Best of all, you won't be as tempted to spend that cash since it's already moved out of your main account.
Good luck with the spring cleaning and keeping your finances organized all year.
By Catey Hill, lead writer at IRA Market
(Image: "Woman & Abacus" image via Shutterstock)