FINANCIAL ORGANIZING
Organize Your Finances BY KATHERINE A. WELCH
If you’re like me and have spent the last few months enjoying the beautiful outdoors, you may be facing a pile of papers that need attending. While it’s tempting to push off the inevitable, now is actually a great time to get your household finances in order. Here are some tips on what to look out for and how to get started. ORGANIZE AND ELIMINATE First, gather all your bills and documents in one place, and put anything that can be tossed into a shred pile. Utility and credit card bills, and explanations of benefits for processed medical claims (if you do not itemize for taxes) over a year old can all be shredded. Then start to organize what must be kept. With my clients, I’ve found setting up broad filing categories, such as banking, insurance, medical, tax and current year’s paid bills, is an easy way to start. You can always drill down more specifically later on. Most accountants suggest you hold onto copies of at least three years of monthly/quarterly bank and investment statements, along with the rest of your supporting tax documentation (capital improvements, donations, medical claims if itemizing, etc.). This brings me to my next tip: CONSOLIDATE! You may have a number of bank accounts because of the gifts or incentives offered for opening them. By now, that perk is likely gone. Do you have several accounts with a low balance? Are there any accounts you haven’t accessed in over a year? Decide which bank you use most often and stick with that one, un-
“You cannot escape the responsibility of tomorrow by evading it today.” - Abraham Lincoln less there is good reason not to. Consolidating credit card debt to one or two low-interest options can help you stay on top of bill payments, avoid late fees and stick to a budget (just watch out for balance transfer fees). If you have a slew of store credit cards, pay off any remaining balances and put them aside. One late payment can quickly undo any promotional savings you received. (Note: You do not necessarily need to close these cards, as that could impact your credit score.) Are you in possession of individual stock certificates from an inheritance or longago purchase? If so, it is in your best interest to deposit them into a brokerage account. Doing so will streamline your paperwork, as all of the stocks in a single brokerage account will be reported on a single 1099. You also might consider rolling over a 401(k) account into an existing IRA if you are satisfied with the fund options and professional advice available to you where your IRA is custodied. As you go through the above process, make sure your accounts are properly titled and have the correct beneficiaries. westchesterseniorvoice.com
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fall 2021
LOOK AHEAD Now that you have a handle on the state of your personal finances, review your net worth and current budget. Also, check that your homeowner’s, auto and life insurance policies are up to date and reflect your current circumstances. Then, inform a trusted family member of where and how to access any information they might need in the event something happens to you. This extends to wills, proxies, deeds, titles, birth/marriage certificates, government IDs, etc. If you want to be especially prudent, also scan these documents onto a password-protected drive. OTHER CONSIDERATIONS If you are age 72 or older, note that RMDs (Required Minimum Distributions) are back this year for traditional IRAs. You can call your account provider to get an estimate of what yours will be. Finally, mark your calendar for Medicare Open Enrollment (begins October 15) to make sure your existing plan will work for you next year. It is never too late to get a handle on your household finances. If doing so this fall seems overwhelming, set a future date with yourself to address them and stick to it. You’ll gain peace of mind that everything is in order, and save time, money and potential headaches down the road! n n n
Katherine Welch is a personal financial administrator and owner of KWD Personal Financial Concierge. She helps people save time and money by navigating the management, organization and preparation of their household finances. She can be reached at 631-793-5097 or kwdconcierge@gmail.com
