Personal Finance

Decluttering Your Financial Records

Since we have all been at home for months and doing things around the home, I thought I would rerun this appropriate newsletter about what you need to keep and toss for your financial records.

Here is what you can get rid of:

Paystubs – Do you have a stack of them? You can get rid of last year’s because you have a W-2 that summarizes what you’ve earned. Keep the W-2. Make sure they match before shredding.

Bank Statements – If your bank gives you an annual summary or statement, then you can get rid of all the monthly or quarterly statements, but keep the annual summary / statement.

Tax Returns – Generally, you can get rid of tax returns that are seven years old or more (2013 and older) along with the supporting documentation. However, you will want to check with your tax preparer if you:

bought, sold, and/or own a home
hold certain investments
received certain gifts
have any other special circumstance that requires you to keep related paperwork indefinitely.

In other words, check with your tax preparer before shredding your returns.

An alternative to paper files

Keeping your records on your computer is a great alternative to paper files. We had a lot of paper clutter hanging around, so I started the process of scanning my records as pdfs. If you need a piece of documentation, it’s much easier to locate and open a single pdf than it is to search through a big, cluttered file full of paper. The best part is, that you don’t have to refile the pdf after you’re done looking at it. It’s also easier to fax or email a pdf if needed. Think of all the times you’ve needed to share information about insurances, taxes or rebates. Computer files are great to work with. Remember to keep a back up of your files. You wouldn’t want to lose them if your computer crashes.

Make sure to shred

Remember when I say “get rid of”, I mean for you to shred each and every document that has your personal information on it before throwing it away. You don’t want to offer dumpster divers an opportunity to steal your identity.

Call your tax preparer to see what you need to keep and start to go through your paperwork to eliminate what you don’t need. Happy Shredding!

Simplifying By Doing It Ourselves

We have made choices in our lives to do things ourselves and not pay for the service. It’s a personal choice that we are happy with.

With that in mind, I want to share with you what we personally don’t spend money or reduce our spending on in our household.

Our Home:

Yard work
Spring and fall yard clean up
Snow shoveling
Gutter cleaning
Power washing
Trash / recycle – would have to ay a trash hauler as our town doesn’t provide this service
Rain barrel – we collect rain water and use this to water the garden and plants
Compost Bin – our town has a goal to go waste free, so we are able to take our food waste to the town for compositing

By doing these things ourselves, we save money each and every month that we can use in a variety of ways (reduce debt, increase savings).

Simplifying Home Improvements

If you have followed my blog, you know that we do projects around our home all the time. We typically a yearly list to do.

With more time on our hands and being a homeowner, means there is always a project / improvement that needs to be done, some by us and others by professionals.

Our first project this year was to replace the grass between the road and sidewalk with plants. Delivery trucks parking on the sidewalk and the salt from the winter storms always made this grassy area a mess. Our hosta plants needed to be split, so this solved the problem. We removed the grass and placed weed block down, added the plants and completed it with mulch. No cost to us, just labor over two weekends.

Next, we starting to replace fence panels. We are still doing this ourselves, by replacing a panels or two when we have a few hours and the weather cooperates. We’ll do what we can and at a slow pace. It sounds easier than it is, because it’s not only replacing the panel, we need to breakdown and transport the old panel to the town’s transfer waste station.

As you know, home improvement projects and maintenance are easier to do now versus having a major emergency home improvement project later.

Simplifying By Reducing Paper

Do you find yourself swimming in paper? We did.

There are things you need to keep (tax records, purchase receipts, home expenses and more), but there are the other things that we seemed to keep as well. So much so that we had several files cabinets worth.

Over the past few years, our goal was to simplify and reduce the paper files we kept. This is what we did:

Scanned and digitized the family photos, slides and movies – this was a huge project
Scanned bank / credit card and investment statements
Eliminated manuals – we can look it up if we need to refer to this online
Scanned income tax returns
Scanned medical records
Scanned and organized recipes – this eliminated all the recipe cards from my mother and many cook books too

Now most files are scanned and backed up and the paper is eliminated. It’s such a great feeling when there is less paper. As an added bonus, we are down to one file cabinet. We sold the other file cabinets for some extra cash.

Remember to check to find out what you are required to keep and for how long before getting rid of your paper.

Simplifying By Opting Out Of Emails

Are you overwhelmed by all your emails in your inbox? I was!

Having several email addresses and tons of emails was too much for me.

I took the time to opt out of many emails. First, I eliminated emails that I never subscribed to. There was a lot of those.

Next, I made some conscious choices about others. There were some that were no longer relevant to me. Some that I never got around to reading. Some that I subscribed to because I made a purchase(s).

Less in my inbox is a relaxing feeling for me. I don’t feel pressured by another to-do in my life.

I also eliminated so email accounts to have less to go through each and every day. For me less is better and saves me time and money.

Simplified My Exercise Routine

Along with a healthy eating, for us comes exercise. Since the stay-at-home orders in early March, we changed our exercise to walking in the neighborhood. We walk difference ways, sometimes along the water, sometimes in the area, sometimes on a trail all within walking distance from our home – no car / gas needed.

It’s been almost four months of daily walking, regardless of the weather we walk and walk. One thing we have done is to combine exercise with errands. We are fortunate to live close enough to town and we do errands on some walks. It could be to the Post Office or the bank or the drug store and many more. But about once a week, our walk includes errands. It’s fun, gets things done and no need to use the car or pay for a gym membership. And as a bonus, we have met people along the way that we never knew before.

We get our exercise in and save money. I wouldn’t trade this for the world.

Simplifying By Saying No

It’s such a small word, but packs so much into it. Is the word “no” causing you problems? The word “no” is something that I had so much trouble with for many years. Now I am embrace the word and am loving it.

So what do I mean? Are you doing things you don’t want to do? Are others making problems for you? Let me explain. Are you at the check out and are asked would you like to save an additional 15% of your purchase today. You think why wouldn’t I want to save money, so you say “yes”. Now you have another credit card and the possiblity of more debt and hurting your credit. Did you really want that? Another example is when you are asked to do something, do you automatically say “yes”. Maybe you really can’t afford to do that at this point, but you said “yes” so you won’t disappoint others. This happened so many times for me.

For me to break the routine of always saying “yes” and pleasing others, I now take a step back and think about it before answering. I consider my options. Do I really want that? How would I benefit from that? What are the long term repercussions? Stop and take the time to think about what’s right for you. You can easily do this by saying – I’ll let you know, not at this time, I have to check my schedule etc. That gives you the time to make the choices that is right for you. You can be true to yourself and give an honest answer with some thought. Sometimes the answer is “yes” and sometimes the answer is “no”. You made the choice you want and that is best for you.

Simplifying Long Term Goals

Did you set up your automated saving deposits from your paycheck?

The next step is to automated your other savings goal. What do you want to accomplish / have in your life? Maybe your are saving for a home, car, saving to pay for college, retirement. The choice is yours. You need a plan to achieve your goals.

Set up a smart goal – specific, measurable, attainable, relevant and timely. For example, I want to save $20,000 for the down payment of a new home by 2025. Breaking that down, that’s $20K in 4 years or $5K a year or $96.15 per week. Break it down into small manageable steps so it’s not overwhelming. Set up a automatic transfer for the amount you need. Then sit back and watch your savings grow to realize your goal.

Just like you automated your savings yesterday, automate the finance part of your long term goals. I would suggest that you have a separate savings account for each of your goal, that way you can measure your progress and know exactly where you stand at all times.

It’s that simple to start on a path to achieve your goals.

Simplifying Our Mail

Are you overwhelmed with mail? If you are like we use to be, we got a tone of physical mail. It’s taken a while, but we have reduce our paper mail more than 50%.

Step 1 for us was to eliminate unwanted mail. We called each and every catalogue that arrived to ask to be taken off the mailing list. It wasn’t as time consuming as you are thinking. WE created a pile and when we had time we made the calls – thinking wait for an oil change, waiting at a doctor’s office, etc.

Step 2 for us was to call the ones we wanted to ask that they not share our name. You are probably thinking that the privacy act does this and it does to some extent, not as much as I wanted. They are share you information with affiliates.

Step 3, in addition, we have signed up for these organization that reduce your mail:

Less mail simplifies our lives in many ways – less paper to shred / recycle, no more piles of mail to go through and not more temptation to buy what we don’t need.

Your Finances Today

Our lives are changing from what we know. People are losing their jobs, others are furloughed. You can’t count on unemployment as your survival means. We have to fallback on our savings (hopefully you have one). If not, you have to prioritize your spending.

Eliminate the expenses you can. If a service you pay for is closed, try to stop paying for it. Reduce other expenses. But at some point, that may not be enough. What can you do and what bills should you pay and which can you delay.

Here’s a article from CNBC Which Bills To Pay During a Coronavirus Pandemic

Remember that each state / city has specific policies, check with the state that you live in to see what is available to you.