Spring Clean Your Finances

Loran Graham Co. |

Spring is a time of renewal and regeneration. It is also a time to get organized and simplify your life. From closets to garages to file cabinets, now is a great time for reducing clutter. Have you considered simplifying your financial life as well?

As recently as 10 years ago, I remember preparing financial plans by hand using a massive Excel workbook and linking formulas. (Back then that was considered high-tech). Personally, I was a “power Quicken” user and would spend hours per week downloading transactions and reconciling my checkbook to the penny, and my desk at home was jammed full with statements and records, albeit organized neatly in folders.

Today, we use state-of-the art financial planning software, which resides in a secure “cloud” online. (That’s where my personal financial plan resides too. But don’t worry -- I plan to work at least another 25 years!) I have abandoned Quicken in favor of our firm’s Spending/Budgeting tracker built-into our financial planning software’s private client website. As a result, I am able to efficiently track my budget in less than 2 minutes per day. (Sounds like one of those get-fit Ab exercise workouts, right?) But seriously, that’s all it takes once you get into a routine. And you don’t even need a computer. I can access the spending tool directly from my smartphone, and so can you! I’ve also gone paperless with all my important documents, which I store securely in my Document Vault. As they say, an uncluttered desk results in an uncluttered mind.

Here are some essential areas where you can “spring clean” your finances:

Consolidate your finances. If you have a collection of retirement accounts from past employer plans, consider consolidating your retirement funds for convenience and simplicity. To be sure all your banking and investment accounts are accurately inventoried and reflected on your private client website, go to lorangraham.com and click Client Access from the menu. Can’t remember your password? Give us a call and we can reset it for you easily.

Automate your budget. Automate your budget tracking process in the “cloud”, and abandon the manual spreadsheets and tedious software programs (such as Quicken or Money). Our spending/budgeting tool is built into the private client website, where you can link your credit/debit cards. Using artificial intelligence technology, the tool reads the vendor line on each transaction (no downloading required) and categorizes it for you with about 80% accuracy. It is also a learning system, so it remembers when you correct a category. For example, when I stopped at a new gas station, it sometimes categorized the charge as “groceries” instead of “gas.” (No, I don’t stock-up on Twinkies at the mini-mart.) After taking about 10 seconds to correct the category, now it remembers to label as “gas” anytime I stop at that gas station. Since people are creatures of habit, the accuracy gets closer to 99% within a matter of months. Worried about security? First, the system uses encryption technology that is twice as strong as the federal banking standard, which is why over 13,000 financial institutions have agreed to integrate with the system. Second, all the transaction data is encrypted and firewalled within your client portal, so it is completely private. (I can’t even see it!) Admittedly, the technology does not do well with how to handle cash and checks. If you are more comfortable with your tried and true “envelope” system for tracking expenses with cash, that’s okay. You have to go with whatever works. Nonetheless, in an increasingly cashless society, this is a great way to be a good steward with tracking your finances while also reclaiming countless hours of your life back!

Go Paperless. Consider going paperless with your personal documents. The private client website includes a digital Vault where all your important documents and statements may be stored. (See PDF attachment below for a helpful Document Vault checklist.) The key to success with paperless is to invest in a quality shredder as well as a quality scanner. The shredder should be cross-cut (think confetti, not strips) for security, and handle enough pages that you don’t go insane feeding documents page-by-page. You should be able to get a good, economical shredder that handles 12 pages at a time for under $200. (Check out Costco). For scanners, hands down I highly recommend the Fujitsu ScanSnap iX500. It’s a bit of a splurge (retailing at Amazon or Office Depot for around $420), but trust me. If you are serious about going paperless, the ScanSnap will change your life. It has the horsepower to scan a 25-page, double-sided document (50 images) in about a minute. Amazing, right?! Most importantly, it is truly one of those plug-and-play devices that you can set-up from box to computer in about 5 minutes. Here at the office, we have one at every workstation and could not imagine life without it.

The best part about simplifying your life, is that it frees you to focus on the things that are truly important in life. Not sure where to start? Give us a call today and we can help you get organized.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.