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Organize Your Personal Finances for the New Year

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By Josh Espinosa CFP®, CIMA®

It’s not just your house that might need a little straightening up. Your finances can also benefit from a “cleaning” every now and again. And what better time than the beginning of the new year! Why not take a look at everything you may have put off, and start organizing your personal finances to align with your vision for the future? Below are some areas you may want to start with.

Determine Your Net Worth

Your net worth is the total of your assets minus your liabilities, and determining it can help you lay the groundwork for an organized financial future. In other words, your net worth is the figure you get when you add up everything you own from the equity in your home to the cash in your bank account to your investment accounts with CAS and then subtract from that the value of all of your debts which may include a mortgage, car, student loans, or credit card balances.

When it comes to your financial health, there is no single net worth number you should be striving for. It is unique to you and your financial roadmap. You could use your net worth to track your progress from year to year and to hopefully see it grow over time.

Go Paperless

Those bulky paper files take up more than physical space, they can make it harder to keep track of statements and bills. With a paperless system, there is a simple, online backup of everything. Your files can travel with you wherever you go.

If you have regular access to a computer, setting up online payments for your bills can go a long way towards streamlining the organization of your finances. In many cases, you can choose to have monthly deductions taken automatically from your bank account or you can choose to manually initiate each payment.

You can also keep your most important files in an online vault, like our cas360, which allows you to easily organize and categorize your files so they are always accessible and protected from floods, fires, and loss.  

Consolidate

You may want to take the time each year to consolidate and update accounts so they align with your current usage and financial situation. Have a checking account you no longer use? Close it! Have a will that has not factored in a change in family situation or lifestyle? Change it!  Now is the perfect time to really decide what you need, and which documents need a bit of TLC.

Some other areas you may want to look at include:

  • Gather new quotes for car, home, and life insurance and adjust coverage levels if needed.
  • Check your mortgage rates and see if it makes sense to refinance.
  • Check your credit with a credit checking site. However, you are only allowed one free copy of your report from each of the three credit bureaus per year. You either can check one bureau (Experian, TransUnion, or Equifax) every four months, or you can check all three at one time and wait 12 months to check again.
  • Check fees on phone, cable, and other bills to see if you are paying for services you don’t use.
  • Confirm your beneficiaries are correct on retirement accounts, life insurance policies, and annuities. Often, due to personal changes such as marriage, divorce, or the birth of children, the original beneficiaries may not be who you currently desire.

Organizing your finances takes time, patience, and discipline, but could be well worth it in the end. The new year doesn’t need to be the only time you organize; you should keep up-to-date as often as possible, but it can be an opportunity to start the year off with less worry and stress. If you have any concerns about your personal finances, your CAS financial advisor can assist to help you stay on track and be prepared for the future.

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