5 Personal Finance Spring Cleaning Things To Do Now
Posted on May 7, 2007
They always say spring is the time to clean up anything you have been neglecting over the past year. Everyone gets so busy now that we frequently procrastinate on some of the most important items. Here are five important spring cleaning things to do now for your personal finances:
- Eliminate Private Mortgage Insurance (PMI). If you bought your home with less than 20% down and did not do creative financing you probably had to pay private mortgage insurance or PMI. This allows the lender to insure your mortgage in the event you default. Once 20% equity has been established you can cancel. If you are unsure if you have 20% equity, then give your lender a call and ask. It never hurts to ask.
- Consolidate 401Ks from other jobs. In today’s market people switch jobs much more frequently than in the past. If you have other 401Ks out there consolidate them into either your current 401K or an IRA of your choice. Having your retirement funds centralized makes it much easier to manage and remain correctly diversified.
- Rebalance your 401K portfolio. My 401K provider has an option on the website that allows you to very easily rebalance your portfolio to your original diversification. If one fund has outpaced another, and has made your portfolio off balance, this is a good time to go back in and correct it. The Sun’s Financial Diary had an interesting post on rebalancing 401K portfolios.
- Throw out old, unnecessary financial records. We have all just filed income taxes so many documents and receipts can be thrown out that are no longer necessary. After ATM and store receipts have been verified with a bank statement they can typically be thrown out. Tax statements from longer than seven years ago can typically be safely thrown out as well. Lots of people save pay stubs forever, but I rarely save mine longer than a year.
- Adjust tax withholding on W-4 if you received huge tax refund. This is often a hotly debated subject matter: Do you get the big tax return at the end of the year or keep more during the year and get a small return? Most choose the big return given the average tax return was around $2000 or so this year. Now is the time to make a change if you want to stop giving the government an interest free loan all year long.
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7 Responses to “5 Personal Finance Spring Cleaning Things To Do Now”
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[…] lists 5 personal finance spring cleaning things that you may want to do now. It mentioned one of my post on 401(k) […]
Thanks for using the article!
Nice list! That reminds me I need to rebalance my 401K!
Regarding #4, I would add, make sure you shred the financial documents before you throw them away!
ISPF:
Good point! Shredding is pretty much essential these days prior to throwing out old documents.
[…] 6 Plus 6 presents 5 Personal Finance Spring Cleaning Things to Do Now […]
Great five! As for me…
I’m planning on buying a home this year. BOA is offering “no PMI” loans. I’m hoping to take advantage.
I just consolidated my 401Ks. I posted the process here: My 401(k) Rollover
I haven’t been around long enough to need to rebalance my 401K. Must be nice!
I keep only the last paystub of every past year.
[…] of pure personal finance content. I had the good fortune to be included in the Carnival with my 5 Personal Finance Spring Cleaning Things To Do Now post. There is tons of content included in this edition so be sure to check it out. A few of my […]