In a few short weeks, the summer of 2010 will be history. For teachers and students, summer is ending even sooner. The remainder of the year will fly, and before you can catch your breath, it will be tax season again. Avoid the stress you’ll undoubtedly face during the rush of the holiday season by taking some time right now to consider organizing your finances.
If you’re reasonably familiar with your own finances, all you need to do to clean up the clutter can be done in one day of a summer weekend. Let’s get started.
Open a high-yield savings account. All you need is one checking account, perhaps one held at a local, convenient banks, and one high-yield savings account that accepts automated electronic deposits from your checking account. If you have more savings accounts and your bank account balances don’t total more than the FDIC maximum of $250,000, you don’t need any more accounts. The key to organizing is keeping it simple.
Consolidate your credit card balances onto one great credit card. Take the card with the lowest interest rate if you carry a balance or the best rewards if you pay off the balance each month, and consider transfering your balances. If you’d prefer not to pay a transfer fee, look at your debt and start thinking about the best way to pay off your cards.
Track your money so you know where your income goes. Software like Intuit’s Mint.com and Quicken help you organize your finances by allowing to keep your account information and activity in one place. These applications will give you a true picture of your progress saving, paying off debt, or building wealth. You can also use built-in reports and graphs to help you visualize the state of your money.
Collect and categorize your receipts. This will come in handy when it’s time to file your income taxes. Having all your receipts in order and ready for review will help ensure you don’t miss any tax deductions.
Review your credit report and score. The end of the summer is the perfect time to retrieve at least one of your three free annual credit reports from AnnualCreditReport.com. Review the reports for any errors or unexpected changes. Also consider checking your credit score, particularly if you expect to qualify for a mortgage at any point in your future.
Think about your charitable giving now. Most people tend to wait until the end of the year to initiate their charitable giving, perhaps an afterthought while reviewing other tax-saving measures. With some time left this summer, you have the opportunity to carefully plan your approach to giving before charities begin their holiday marketing campaigns. The best decisions are made not when you’re under pressure to have your charitable contributions postmarked by December 31.
Every year, time seems to progress faster. Life seems to be a race to a finish line. A little organization and careful thought now can make the next few months much less stressful.