Last week, we wrote about clearing out financial clutter, especially the paperwork that piles up at home and work.
Weeding out unnecessary papers has obvious benefits: staying on top of bills and taxes, avoiding late fees, reducing exposure to identity theft and even making a grab-and-go exit easier in a natural disaster.
But it's not just about eliminating paper pileups. Getting organized also can be a godsend to your family, said Claes Bell, senior banking analyst at Bankrate.com.
"A lot of people don't think about this, but if you or a loved one passes away unexpectedly, having account numbers, website log-ins and other key financial information in some kind of order can make it much easier on your (family)," he said. "Do you really want to burden them with the chore of cutting through your financial clutter?"
For all those reasons, here are five more tips:
Less is more
If you have lots of different bank or brokerage accounts, you're generating lots more paper than you may need.
Unless you have a specific plan, such as better savings rates or laddered CDs, it can pay to consolidate your accounts among a few banks or credit unions, says Bell. Some banks offer perks, such as waiving fees or paying higher interest rates, to those with more than one account. Just be sure your combined deposits stay below the $250,000 limit for FDIC coverage.
It's the same with investments and brokerage accounts.
Several years ago, John Ulzheimer, consumer education president for SmartCredit.com, realized he had "way too many" overlapping stocks among the dozen mutual funds in his IRAs and 401(k). Not to mention all the prospectuses and quarterly reports that arrived in the mail.
So he simplified, converting some mutual funds to bond funds or consolidating into existing funds. Not only was there a dramatic drop in the amount of paper he dealt with, but Ulzheimer said his investment returns improved.
Switch to online banking
One obvious way to shed paper is to pay bills online, from utilities to credit cards to cellphones.
Remember to keep track of payment due dates so you don't incur a late fee. And if you set up automatic payments, be aware of triggering overdraft fees if your bank account dips too low.
Online payments also can help protect against fraud, since you're not mailing or generating as many financial pieces of paper, "the stuff that fraudsters love to get their hands on," said Ulzheimer.
Ditch extra credit cards
Getting rid of excess plastic can unclutter your wallet, as well as drop the number of monthly billings. And there are added benefits: "You won't accidentally make a purchase on a little-used credit card and then forget to pay the bill, which can mean big late fees and serious credit consequences," Bell said.
But be careful. If you close too many credit cards at once, it can ding your credit score. Rather than closing the extra accounts, Bell suggests it might be better to cut up the cards, so you're not tempted to use them. Just remember to periodically check unused cards for fraudulent activity.
Almost any financial record can be found online. Switching to electronic delivery of banking, bills and tax documents can save lots of trees.
Several years ago, Ulzheimer found himself buried in file boxes, mainly financial paperwork for his clients and family. "Clutter doesn't begin to describe what my office and 1,600-square-foot storage unit used to look like," said Ulzheimer. "It was more of a disaster area than an office."
Five years ago, he started switching everything online, including his 1099 tax documents, brokerage statements and check deposits.
"It's a myth that you have to have a paper copy of everything." For instance, Ulzheimer receives all his 1099 tax documents online, then emails everything to his CPA at tax season.
By shrinking the amount of incoming paper, "I'm trying to live a minimalist life, financially." An added bonus: He emptied the storage unit, saving roughly $1,100 in fees every month.
Get off lists
One way to zap financial clutter is to stop it from entering your house or your computer. Here's how:
Junk mail DMAChoice, a service of the Direct Marketing Association, a Washington, D.C.-based trade group, lets consumers delete their names from thousands of mailing lists, including offers from many credit card companies, banks, magazines and retailers. You also can stop mail for deceased persons and mail addressed to "Current Resident" or "Occupant." Requests take up to 90 days to become effective but are good for three years.
Unwanted email DMAChoice also offers its "Email Preference Service (eMPS), which lets you get off many but not all email marketing lists. (It does not apply to most charitable, political, alumni or professional organizations.) Registration is good for five years.
The do-it-yourself way: Spend some time deleting any regular emails you rarely open. Scroll down and look for the tiny print that says "Unsubscribe," then follow instructions.
DoNotCall It's not eliminating paper, but those annoying telemarketing calls are still clutter. To stop most of them, contact the National Do Not Call Registry, managed by the U.S. Federal Trade Commission, at (888) 382-1222 or www.DoNotCall.gov. (It does not cover calls from political organizations, charities and telephone surveys, as well as companies where you have an existing business relationship.) You can register up to three phones, including mobile phones. It takes up to 31 days to be effective, but is permanent.
Overall, "it may be a drag to spend time organizing" your financial documents, said Bankrate.com's Bell, "but buckling down and doing it will save you time and money in the long run."