BALTIMORE (WMAR) - While you’re decluttering and cleaning out those closets don't forget about your bank accounts. If you haven’t reviewed your budget and balances recently, now’s the time to do so.
Like dusting the blinds and mopping the floors, fine-tuning your finances is one of those tedious things that’ll serve you better in the long-term.
Polish your budget
Not surprisingly, JP Krahel, an accounting professor, loves to budget but it’s not because he enjoys making spreadsheets.
“Creating a budget is an incredibly powerful tool to make sure that you've reached your goal whether those goals are saving for your kids' college, saving for retirement, these things don't just happen anymore,” said Krahel, an assistant professor of account at Loyola University Maryland Sellinger School of Business.
Krahel recommends gathering all your financial documents and taking a few hours to sift through them all.
“Anytime that money's moving into your house or out of your house, take those documents and look at them,” said Krahel.
Look at how much you’re paying for car insurance, life insurance, homeowner’s insurance and then check if you’re getting the best rates.
“Take two minutes, make those phone calls, see if you can get a better rate for the same coverage somewhere else,” Krahel said.
Get rid of debt
Review your credit card balances. See if you can pay off the purchases you made over the holiday season, and come up with a plan to ditch the high-interest debt.
“So your high-interest debt, you get no tax benefits, you get nothing out of it, so whether it's spring, fall, winter, I don't care, you should always be prioritizing the debts that are the highest interest and do the least for you,” said Krahel.
Review your credit report
Request a free credit report. Make sure there aren’t any errors or surprises and once you’ve gone through all the documents and paperwork, don’t throw them in the trash.
Anyone living in Maryland can receive six free credit reports a year, two from each of the three credit bureaus, thanks to federal and state law. You can do so by visiting AnnualCreditReport.com and then visiting the three individual credit bureau websites. Space them out to keep a constant pulse on how you’re doing.
Shred old financial documents
“Your garbage could be a wealth of information. You know, because all I would need, not that I would, but all I would need is one social security number, one address, and I can open up potentially a new line of credit in your name and that's a scary thing. People think it's garbage, it's garbage, no! Dumpster diving can reap real benefits for identity thieves,” Krahel said.