Pinnacle Personnel Services LLC | Debbie Hatch
Monday was Memorial Day, a day to remember our fallen; those who paid the ultimate price for our freedom. It’s also typically the recognized start to summer so I might be a little late in talking about spring cleaning, but it feels relevant.
While it’s difficult to know what day of the week it is right now, it feels more like spring than summer. It’s been raining – a lot – in Omaha. The flowers and trees are budding. My allergies are in full force. The world is waking up and, this year, also opening up from the COVID-19 pandemic. We’re almost into a new month.
It feels like a fresh start and science shows we’re more successful when we line our goals up to dates that are relevant to us.
Why do you think we start diets on Monday and new things on January 1st? We can start new projects on Thursday, May 28. We just typically don’t. Our brain likes to begin new ventures when we feel like we’re finishing something else.
Spring typically gives me a renewed energy. I’ve washed my windows, cleaned my office, and tidied up the dining room. We’ve found two (more) bags of material items to donate. I’m thrilled we will be leaving Nebraska with much less “stuff” than we came here with a couple of years ago.
This can be a fantastic time to do a little spring cleaning of our financial house as well. Here are my top 3 financial spring cleaning tips.
CONDUCT A FINANCIAL AUDIT.
Print out all of your financial documents for the past 3 – 6 months. Examples might include investments, checking, savings, money market, certificates of deposit, credit card statements. Everything that involves your money: income and expenses. Do a detailed, line-by-line audit. Annotate what’s coming in and where your money is going. No judgement at all here. Don’t feel bad. Don’t worry about it. Don’t attach any meaning to this first step. You’re just creating a log of what you’re spending and where.
Once you can see all of your finances in one place, then identify one thing (just one!!) you want to change. Write this goal in the SMART construct. It should be:
Specific. “I will only spend $xx on Y for the next 60 days” is much more actionable than “I will cut back on my spending.”
Measurable. Looking at the example above, “saving more” or “spending less” is not as concrete as “saving $xx” or “spending no more than $yy.”
Aligned to your goal. “Taking a 20 minute walk every day” is a fine goal but if you’re attempting “to save $xx in an account specifically earmarked for retirement”, it’s not helpful. Actionable can be another great word to use for the “a”. The goal is something you can take action on – you have the power to do.
Realistic. You’re probably not going to take a world cruise, buy a new Jaguar and save $1.5 million in your retirement account over the next 12 months unless something really amazing happens. (fingers crossed for you). Set goals that may stretch you outside of your comfort level a bit, but that are actually something you could accomplish. By the way, we don’t control market reactions either so, “investing $xx in my long term retirement account” is much better than “making $xx on my investments in the next three months”.
Time-based. Open ended goals end up becoming dreams. “Save for retirement” doesn’t convey immediate action. “Save $20 per month for the next 12 months” does. See the difference? Bonus points for chopping the goal into smaller chunks you can celebrate as you go through the year! Also important to your human brain.
REVIEW YOUR ANNUAL SOCIAL SECURITY AND CREDIT REPORTS.
Request a copy of your credit report(s). You’re entitled to a free copy annually. Annualcreditreport.com is the only site authorized by federal law to provide you with a truly free credit report. Many credit card companies, banks and credit unions may also offer access to these reports so check around. A few things to be aware of though. First, although you are entitled to a copy of the credit reports, the free annual check-up does not include your credit score. Secondly, consider whether you’d prefer to receive all three reports at one time, or whether you want to get one today, another in 4 months and the third, 4 months after that. This can lead to continually monitoring without have to pay anything additional.
Speaking of paying, numerous companies will pull a copy of your credit report(s) and provide your score, for a fee. Be cautious about what you’re getting yourself into. Also, while not attaching a judgement to this statement, do know that I’ve personally found companies like Credit Karma give me numbers not 100% consistent what I pull from the credit bureaus themselves. Your score can change as frequently as your weight on the scale – depending on such things as where you are within the credit card statement cycle, how much debt you’re carrying today, whether a lending institution has recently pulled your credit, etc.
Don’t worry about the score at this point.
What I want you to look at is the information in your report(s). Audit them. Credit bureaus are obligated to report all credit and debt information as long as it is correct and timely. The following items can (and should) be removed though:
- Incorrect information. Examples could include an incorrect account number, account(s) you never opened, someone else’s name, or a judgment for a lawsuit you were never a part of. This is not an exhaustive list.
- Duplicate information. While an account can sometimes show up multiple times, you may want to have your report list it just once. This can prevent lenders from believing you have more debt or credit problems than you actually do.
- Old, negative information. In many cases, negative information, even when accurate, shouldn’t be listed forever. Your credit report may reflect lawsuits, judgments, liens, foreclosures, Chapter 13 bankruptcy, late payments, and charged-off accounts for seven years. Chapter 7 bankruptcy will remain for ten years from the date of filing. Child support arrearage and default notations for student loans, can continue to be reported until satisfied.
If you’re not planning to take out a loan in the near future, it’s a good idea to lock or freeze your credit. Both actions are similar in that they prevent others from accessing your credit information but there are also some differences. A credit freeze offers more stringent legal protections. By Federal law, if something goes wrong – for example, an account is fraudulently accessed anyway – consumers are protected from financial liability. A credit lock is simply an agreement between you and the credit reporting agency. It may not be clear who will be liable for any losses.
Locks can be turned on and off instantaneously by logging into your account. By law it’s now easier to unthaw a freeze than it was in the past. All freezes are supposed to be unthawed within an hour of an electronic or telephonic request. Unfortunately there are occasional glitches. If you’re planning to have your credit checked in the near term, most recommendations are to thaw at least three business days prior to your loan application.
- Online: Create an account if you haven’t already. You can freeze, unfreeze, lock, and check the status of your requests.
- By phone: 1-800-349-9960
- By mail: Equifax Information Services LLC, PO Box 105788, Atlanta GA 30348.
- Online: You don’t need to create an account. There is a simple form to complete.
- By phone: 1-888-397-3742
- By mail: Experian Security Freeze, PO Box 9554, Allen TX 75013
- Online: You’ll need to create an account.
- By phone: 1-888-909-8872
- By mail: TransUnion LLC, PO Box 160, Woodlyn PA 19094
While you have your credit report in front of you, this is a great time to create a My Social Security account. The system asks questions to validate your identity – many of the answers can be found on your credit reports. Once you create an account (or log in if you already have one), audit your annual statement.
Specifically look at page three and ensure the amount that the Social Security Administration is showing matches up with your reported earnings for any given year. If you notice errors, now is the time to get them corrected.
Also, once again, protect yourself! Change your ssa.gov password and/or set up double authentication so you’ll receive a text each time anyone attempts to access your SS account.
I’d love to hear from you! Do you also feel like it’s more spring than summer? Are you doing some spring cleaning? Physical or financial house? Both?
How can I help?