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Spring Clean Your Finances

Spring Clean Your Finances
March 20, 2012

March 20 marks the first day of spring. During your annual spring cleaning crusade, it's more than just your closets and windows that need attention. Spring is also the perfect time to clean and organize your finances. Here are some ways to get started:

Clear the clutter. Consider investing in a financial organization system, such as alphabetized file folders. Also consider buying a shredder to purge receipts and statements you no longer need. The IRS requires taxpayers to maintain tax records for all income, deductions or credits claimed on their federal returns for three years.

Safeguard important documents. Financial documents such as savings bonds, life insurance policies, deeds, property titles and stock certificates should be stored in a fireproof safe or in a safe deposit box at your bank.

Organize payments. Setting up automatic payments for recurring bills such as car loans, cell phone bills or monthly mortgage payments is a one-time task that offers ongoing benefits. Not only are you less likely to incur late fees, but automatic payments and online statements also reduce the paper pileup.

Reduce your interest expenses. Review your debt to make sure you are working toward eliminating it. Reducing or eliminating debt can boost your credit rating and improve your monthly cash flow. It's generally best to pay off debt with the highest interest rate first.

Consolidate accounts. Instead of keeping track of multiple credit card bills and statements from several checking, savings and investment accounts, consider which accounts could be closed or consolidated. Juggling too many accounts may make it more difficult to remember payment due dates and to monitor account activity for possible fraud. Before rushing to close credit accounts, remember it could result in a drop in your credit score. It's a good idea to keep your oldest credit cards because one factor of your credit score is how long you've had credit.

Check your credit reports. Look for errors or incomplete information that could prevent you from getting the best deals on credit cards, mortgages or other loans. You are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit bureaus -- Equifax, Experian and TransUnion. Although you can ask to receive copies from all three credit bureaus at the same time, you can also spread out your requests throughout the year to check for major changes or inconsistencies. To order your free reports, go to or call (877) 322-8228.

Check your insurance levels. As life changes, so do insurance needs. Take some time to review your different insurance policies, such as health, life, disability, homeowners and auto to make sure you have enough coverage to safeguard you and your family while at the same time not paying excessive premiums. Remember, some insurance gets more expensive as you age, so there's no reason to wait.

These tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. The IBA serves it members by providing legislative advocacy, training, regulatory compliance and other services designed to enhance the ability of banks to serve their communities. Learn more at