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Simplify Your Finances

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Dealing with your finances can seem like an overwhelming task. But the truth is, when you take the time to simplify your finances and whittle them down to the basics, managing your financial life is a piece of cake. Here’s everything you need to know about simplifying your finances in the New Year.

Figure out what’s important
It’s no surprise that the more financial objectives or goals you have, the more difficult it’s going to be to achieve them all. For best results, focus your attention on three to five main financial goals at a time. To prioritize which goals are most important to you, write down a list of your top 10 goals in great detail. After you have written down your goals, figure out which goals should be your top priority—to do this, look at whether or not your goal is a short-or long-term goal, the resources achieving the goal requires and how much time and attention it will take from you.

“Deciding which financial goals are important to you all depends on your lifestyle,” explains Vice President of Two Rivers’ West Des Moines branch and Mortgage Lending Manager Katie Wheeler. “Most customers I work with are interested in paying off high-interest credit card debt, while other customers are looking to save enough money for a down payment on a house—it all depends on where you are in life and your unique needs.”

Regardless of your goals, remember to make them manageable and realistic. If you’re a beginner in setting goals, try starting off with smaller goals. Once you’ve tackled a few smaller goals, it will make achieving those bigger goals feel like nothing!

Lose the extra paper
Now that you’ve narrowed down your goals, it’s time to lose the extra paper; keep important papers and shred everything else.

Here’s what you should keep:

  • Seven years worth of tax returns and supporting documentation
  • Records of any accounts that are currently active
  • Records for the sale of an investment, such as a home or stock
  • Disputed bills
  • Vehicle titles and loans documents
  • Important licenses and certificates
  • Home improvement records for the last three years

Here’s what you should shred:

  • ATM receipts once the transaction appears in your account
  • Bank statements over one year old
  • Credit card offers
  • Extra or unused checks
  • Pay stubs (after you’ve double checked your W-2 and paid your taxes)

If you’re not interested in keeping any papers on file, another great option is to keep electronic copies of all your important documents.

“Keeping electronic copies of bank statements or credit card accounts is the perfect solution for those customers who hate keeping track of paper documents,” says Wheeler. “Just remember to back up all of your files on a separate hard drive in the event your computer crashes.”

Consolidate your accounts
Having multiple accounts adds a complexity to an already complicated financial life, and can even open the window to security fraud. Any accounts that you have not used in over a year, or have low funds, consider consolidating into one larger account. Not only will having one account allow you to save over 10 percent more with interest, but it will also help you keep track of exactly how much money you have and how much money you are spending.

“A good rule of thumb is to have one account for day-to-day spending, one account dedicated solely for long-term saving and one account used only for online spending,” explains Wheeler. “To keep your identity secure, don’t forget to password audit any accounts you choose to keep active.”

Automate everything you can
Keep your savings on track by setting up an automated transfer from your checking to your savings account each month. By automating your savings, you’ll be able to focus on your day to day finances without having to worry about setting aside additional funds later down the road. In addition to your savings, you can also automate payments for fixed, regularly occurring bills—like your car payments or phone bills. Not having to worry about paying these bills on time will open up time for you to focus on the bigger picture of your finances—like managing and maintaining your budget. Just remember to account for these automated deductions when balancing your account or planning for future expenses.

For additional help with simplifying your finances, contact Two Rivers Bank & Trust. We offer a variety of helpful financial services, including personalized financial and retirement planning, as well as 401K options. As your neighborhood bank, we’re here for YOU!