How to spring clean your financial house
It's almost spring, you guys. I don't know about the weather in your neck of the woods, but that's a welcome thought where I'm at, and I live in Texas!
(Northerners, feel free to make fun of my idea of a cold winter. I don't care. I did not sign up for anything colder than highs of 50 degrees.)
At any rate, I've been on a cleaning and organizing kick, a bit of early spring cleaning, if you will. I don't know what's gotten into me. Maybe it's that the days are getting a little longer and that we've finally had some consistent sunshine around here. And those might be the reasons we spring clean in the first place, according to TLC's How Stuff Works:
“Ultimately, spring cleaning may have more to do with simple biology. During winter, we're exposed to less sunlight due to shorter, often dreary days. With a lack of exposure to light, the pineal gland produces melatonin — a hormone that produces sleepiness in humans. Conversely, when we're exposed to sunlight, our bodies produce much less melatonin. It's possible that we spring clean simply because we wake up from a winter long melatonin-induced stupor and find more energy as the days grow longer when spring arrives. After all, it's easy to allow a house to get a little gross around the edges when you're sleepy.”
OK, I don't know about gross. I am, after all, my mother's daughter. Case in point: Last Christmas, my mother bought me a Roomba. And she did it because we had a lengthy conversation about how great it would be to have a robot vacuum for daily cleaning. In between real house cleaning, of course.
At any rate, when I awoke from my melatonin-induced stupor, I realized that my files, both physical and digital, were a bit of a mess.
Files, files everywhere
My husband and I are selling our vacant land, and we finally have buyers — yea! (Buyers who need things like our septic system design and copies of permits and title documents — boo!)
The good news was that I kept all of these things in a file folder. The bad news was that every scrap of paper related to the land was also shoved into that folder. So, I started organizing the file. That led to organizing our tax return files. Then I just did the whole stupid file cabinet.
Then I realized that some of my files live on the computer, like last year's tax returns. But my digital file cabinet was a mess too, so I spent a few hours organizing those files.
Not so fresh and so clean
I was quite proud of my gangsta organizing skills. I labeled stuff. I purged. I digitized the heck outta some documents. My files were pristine.
But then I read a report from Experian's ProtectMyID, and my bubble burst.
Now, as a financial writer, I get a lot of reports and studies in my inbox. I trash most of them (you're welcome). But this one caught my attention. It was about tidying up files to safeguard your finances and your identity. And the reason that it caught my attention was that I wasn't doing a lot the stuff they said I should be doing. Gasp! My financial house was gross around the edges!
So, I demanded some answers. Or rather, I kindly requested an interview. Here's what I learned from Becky Frost, senior manager of Experian's ProtectMyID.
1. Shred like Steve Vai. Spring cleaning is a good time to get rid of things you no longer need, including old documents. “You probably have documents that you no longer need to keep, like old financial statements from 1992,” says Frost.
But don't just throw them away; shred sensitive personal documents you don't need to keep. “If a document has your current address or an account number on it, for instance, you should shred it,” says Frost. “I highly advocate having a personal shredder at home, and today they're pretty affordable.”
What to look for in a shredder? One that crosscuts, says Frost. “You don't want a shredder that shreds in strips, which are easy for a thief to tape back together.”
Also, for tax documents, check with IRS.gov to find out how long you need to hold on to records before shredding.
2. As seasons change, so should passwords. Want to hear something sad? I'm so bad at remembering my own passwords that I tried using one of those services like LastPass that remembers your passwords for you. Then I somehow got locked out of that too. This was what that looked like.
So point is, I'm good at setting unique, strong passwords. I just don't remember them. And to throw another wrench in this operation, I just learned that I need to change my passwords regularly. Double d'oh.
“We recommend changing passwords with the change of every season,” says Frost, “but that's not something that everyone likes to do.” No, everyone does not.
But Frost had an old-school suggestion for me that she says is perfectly safe in a digital world: Write your passwords down on a piece of paper. It sounded dangerous, but she says it's “completely fine as long as you store that piece of paper in a secure location, like a locked safe box.”
Other password tips?
Passwords should have at least eight characters, including numerals, upper and lowercase letters, and special characters.
They should never be obvious, like part of your name or your mother's maiden name. “Unfortunately, one of the top five passwords people use is still ‘password,'” says Frost.
You should have a different password for every account.
“Also, if you're using something like a bank app, remember to log out of the app each time and to password protect your mobile device's lock screen,” says Frost. “Don't give a thief easy access.”
3. Clean out your wallet. Most of us know that you shouldn't carry your Social Security card in your wallet. If you didn't know that, get that thing out of your wallet! Ditto for passports, birth certificates, and anything with your Social Security number printed on it.
But Frost goes a bit further, saying that we should only carry what we need on a daily basis. “If you have multiple credit cards, only carry the ones you use most often,” says Frost. “Keep the others in a safe place, which means a box or a drawer with a lock on it.”
And the lock is important. Many times fraudsters and thieves turn out to be family members, friends, or employees, and not masked bandits. “Put a lock on the drawer so you won't give people the opportunity to commit a crime in the first place,” says Frost.
Another reason to carry the bare minimum? You might lose your wallet. That happened to my dad last week, and he had to remember what was in it to figure out whom to call and what to cancel.
So, after talking to Frost, it seems that I still have some cobwebs to clean. But what about you? Do your files and accounts need a good spring cleaning? Also, I'd like to ask for your paper shredder recommendations, if you have any!