Financial organization inspired by Marie Kondo


Spark Joy by Spring Cleaning Your Finances

 

In her popular Netflix series, Marie Kondo encourages viewers to tidy up by thanking, then parting with anything that does not spark joy. She and other experts agree that decluttering your stuff can help declutter your life, reduce anxiety and keep you organized.

Unfortunately, this technique doesn’t work for your finances ─ you cannot dispose of financial documents because they don’t make you happy. However, there are things you can do to spring clean your finances and get your financial house in order, including:

1. Reduce Paperwork. Scan and electronically store old financial documents and request electronic delivery of future statements. Keep hard copies of only your most important financial documents, such as prior tax returns, insurance policies and other major financial records.

2. Audit your budget. Prior to April 15th, when you’re reviewing your financial documents and checking your tax return, think about your financial goals and make sure you’re saving enough to meet them. If your compensation or expenses have changed over the course of the year, it may be time to redo your budget.

3. Check your credit report. You’re entitled to one free credit report annually from each of the three major credit bureaus, Equifax, Experian and TransUnion. It’s a good idea to take advantage of this offer and check your credit score because it can affect the interest you pay on loans, your cost for insurance and new employment opportunities.

4. Review your estate plan and documents. A change in your circumstances, such as marriage, divorce or the sale of a business will impact your estate. Review your plan on a regular basis to make sure it continues to reflect your legacy goals.

5. Consolidate. Combining accounts, such as multiple 401(k)s from prior employers into one IRA, will give you a clearer picture of your overall financial health and better control of your asset allocation. You may also have more investment options to meet your long-term financial goals.

Your Luma Wealth advisor can help guide you on other ways to spring clean your finances, and spark joy by keeping in control of your finances.


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