Good Question: Fiscal spring cleaning a big but worthwhile task

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Question: I've been spring cleaning my home and have a lot of old financial records taking up space. How long should I keep thingssuch as receipts and paid bills?

Answer: Spring is the perfect time to go through old records and shred information that is no longer needed.

It's also a good time to examine some aspects of your finances and, if necessary, clean some things up.

A good first place to start is your credit report. All consumers are entitled to a free credit report from each of the credit bureaus annually. If you haven't done so in awhile, it's time to check yours. Go to www.annualcreditreport.com and access your credit report from one of the bureaus. You can obtain all three or you can wait another couple months and retrieve one of the others.

Once you check your credit report, review it and see if there are any items on there that you need to deal with and also check the report for errors. If there are any outstanding items you can tackle, make a plan to do so and follow the proper procedure (www.ftc.gov) for correcting any errors.

Next, review your budget. If you're saying "What budget?" now is a good time to create one. Consider all your expenses, including ones you only pay periodically (like your water and sewage bill). Figure out how much money you have coming and how much money you have going out. If you need some help, use the agency's free online budget tool at www.onlinebudgetadvisor.com.

Once you have reviewed or created your budget, next you might want to look for ways to cut expenses. Budgeting helps you identify expenses you don't realize you have. Try tracking your expenses for one month. This will help pinpoint the miscellaneous spending you're doing. For example, extra trips to the grocery store, lunch or dinner out or that stop for coffee in the morning. Identifying these expenses can help find ways to cut back on spending.

Cutting back on spending can lead you to increasing your savings. By eliminating some extra expenses, you can redistribute the funds into a savings account. Maybe you're saving for something specific, like a vacation or a new car or maybe you're building up an emergency fund that will help you be prepared when disaster strikes.

Have you been saving receipts and bill statements? Do you know what to get rid of and when? See the list below for what to keep and how long you should keep it. Any documents you want to get rid of that contain personal information, make sure you shred them to prevent identity theft. If you have an excessive amount to shred, keep your eyes open for a shred day in your community.

What to keep and for how long:

• One month: ATM printouts

• One year: paycheck stubs, utility bills, credit card receipts

• Three years: income tax return

• Seven years: records of satisfied loans

• Keep while active: contracts, property tax records, home improvement records

• Forever: marriage license, bankruptcy papers, military discharge papers

A financial spring cleaning works the same way a household spring cleaning does -- it's a big task, but once you're done, you're glad you did it.

yourbiz

Heather Murray is manager of education and resource development for Advantage Credit Counseling Service (dba Consumer Credit Counseling Service). For more information about the agency's services, please visit www.advantageccs.org. To access the free online budgeting tool, go to www.onlinebudgetadvisor.com. If you have money or credit management questions, you can email Ms. Murray at hmurray@advantageccs.org. Please provide your name, address and daytime telephone number with all inquiries. Ms. Murray tries to reply to all inquiries but, because of the volume of questions she receives, cannot always respond.


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