Don't forget spring cleaning for your finances
Winter is over (yes, finally), your tax returns are filed and it's time to do some clean up around the home. But your property isn't the only thing that needs some attention this spring. Here's a list of quick, easy and important financial items that may also need some tending to.
Cut out account and credit clutter.
If you have multiple accounts with the same titling and the same purpose -- such as multiple bank accounts, several IRAs and 401(k)s from former employers -- it's time to consolidate them. Doing so will make it easier to track and manage your overall asset allocation and measure your investment performance. With fewer accounts, you'll also be able to keep track of websites and passwords, and keep your beneficiary designations up-to-date.
And while you're at it, do you really need all of those credit card accounts? Do you have multiple loans, such as several student loans or credit card accounts? This is a good time to also consolidate such loans and pay off those small balances. You should close each credit account you don't need. Don't worry about the effect on your credit score -- having fewer accounts will make it easier to protect yourself from identity theft.
Connect with Social Security
Did you know that the paper benefit statement you got from Social Security is now a thing of the past? The Social Security Administration stopped mailing them to workers over a year ago to save about $70 million in annual printing and mailing costs. Many folks and advisors I speak to about this haven't noticed that they're no longer receiving this statement.
To get your Social Security statement, you'll have to set up an account at my Social Security online, where you'll need to supply several items of information to confirm your identify. Your online statement looks like the paper version and includes estimated benefits for retirement, disability and survivors at various ages. It also includes your earnings record and the total Social Security and Medicare taxes you and your employers have paid over your working career.
Tune up your insurance
Make sure you're taking advantage of some money-saving options on your auto and home insurance policies. Here are a few of the most common discounts to look for.
Higher deductibles: If you increase your deductible to at least $1,000, you can save about 20 percent on many home insurance policies. Some allow you to raise the deductible to as high as $25,000 (and $10,000 for tenants) for even larger savings. In many states, separate deductibles are available for windstorm and hail losses. Since on average homeowners file a claim only every eight to 10 years, increasing the deductible seems to be a good way to save money while taking on a limited amount of risk.
Safety discounts: Most home insurers offer a discount of 5 percent or more when you notify them of features such as a smoke detector, burglar alarm or dead-bolt locks. Some companies may offer discounts of as much as 20 percent if you have a fire and burglar alarm that connects to a central monitoring station. Some insurers offer additional discounts if your home has a sprinkler system over the kitchen stove.
Multiline discount: Most insurance companies that sell home insurance also sell auto and excess liability insurance. Many will reduce your premium by up to 15 percent if you buy two or more insurance policies from them. Check to make sure that the total cost of buying the policies from one insurance company is less than buying them separately from different companies.
Finally, if you sign up for e-policy delivery and e-billing, most companies will offer a premium discount. In addition, if you sign up for automatic premium payments and pay in full, your insurance company may offer a discount of up to five percent.
Protect your financial accounts
There's been a barrage of phishing scams, ID theft, stolen credit card files and new security threats like the Heartbleed bug that affected thousands of websites. You can't be too careful about online security.
Why not review all your financial accounts and change your passwords for them. If you've used your email address as your online ID, change that, too. Because in some fraudulent transfers, the thief was able to compromise the victim's email account, use that ID to log into a financial account and then request a new password to be sent to the compromised email account.
If you want to add an additional layer or security, require your financial firm to speak with you and request a verbal password (which is different from your online password) before authorizing a transfer from your accounts. Of course, written instructions should also be required.
Making these changes may be an inconvenience, but if it increases the security of your accounts and prevents even one fraudulent transfer, it will be worth the trouble.
