Tying the knot

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Cleaning Out Your Financial Junk Drawer

By Brandon Schleter

Every year about this time I try to go through some of the clutter in my house. Invariably, I get to my sock drawer and find about eight socks without mates. I also usually find boxes that never got unpacked from the last move, and my basement these days seems like its sole purpose is to store unused junk. Who needs mismatched socks, or a room full of stuff you don't use? Once a year, I toss anything I haven't used in the last year and get rid of all those unworn socks.

I also try to apply this philosophy to my finances. Getting organized makes it easier to stay organized, right? When cleaning out and organizing your financial life, it's important to think not just about your account balances and savings goals, but about everything your money affects in your life.

Are you still paying off last year's vacation, or Christmas shopping? Did you not get to take a vacation because you failed to plan ahead? If you expect to owe on your income taxes this year, have you put enough aside? Speaking of taxes, you've probably seen the news talking about refunds being delayed this year. Does that put you in a bind? If you're feeling pinched financially due to a late tax refund, finish reading this email and then call us immediately. You definitely need help getting organized!

There's more to organizing your financial life than just budgeting as well. Scrimping and saving are great, but budgets that are too restrictive can cause as many problems as having no budget at all. And when you are looking for ways to cut spending, look for the areas that will make a big difference without affecting your enjoyment of life. We recently talked with a client couple who were eating out less and making fewer trips to Target, which is fine, but these efforts added up to only about 1 percent in their budget. They also missed their date nights. We can sit down with you and help identify those spending categories that will make a bigger impact, while still budgeting for the things you enjoy.

A few tips as you tackle your financial organization:

First, survey the area. When you build a house, you don't just start throwing together two-by-fours and hope it all works out. You carefully measure, level the ground and make sure to start with a strong foundation. You can't create a budget until you know where your money is currently being spent. Take some time to observe before you try to make big changes.

Second, I know I sound like a broken record on this, but automate, automate, automate! Set those payments each month and forget about them. You'll barely miss them, trust me, and when you don't have to make the transfer yourself, you're less likely to skip a month.

Third, have an honest talk with yourself and your partner about why you're organizing and budgeting. Whether it's a short-term goal like a vacation or planning for the retirement you've always dreamed of, or simply sleeping better at night, knowing the true reason you're doing all of this will help you stick to your plan.

What do you have questions about as you get yourself organized? Call us any time. We're always here to help.

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