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Your March Financial To-Do List

Consumer Reports logo Consumer Reports 3/1/2017

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March is the perfect month to do some financial spring cleaning.

You're already going through your financial documents for tax reasons. So now is a good time to review your entire financial situation and make some smart decisions about what to do next.

Here's what you should have on your financial to-do list.

Tackle Your Disorganized Files

Woman going through files (close-up)© amana productions inc./Getty Images Woman going through files (close-up)

Many of us don't look forward to organizing our papers. We let documents and receipts pile up rather than figuring out what we should keep, and what we can toss. But the longer you accumulate stuff, the harder it is to get rid of it. Digital files may not clutter your home office, but they should be cleared out from time to time to keep your online data secure. 

To check this off your financial to-do list, start by sorting your piles (and digital files) into four categories:

  1. Keep for less than a year: Most financial documents fall into this category, like receipts from daily spending, bank statements, and last year’s insurance documents. If it's available online, you definitely don't need a paper copy. Keep anything you'll need for your taxes, but otherwise put it into your “to shred” pile.

  2. Keep for a year or more: If you currently own or owe something, hold on to the original documents. Loan documents (not the monthly statements, but the initial agreement), vehicle titles, and household warranties are examples of things you should keep.

  3. Keep for seven years: You don’t need a copy of every tax return you’ve ever filed, but it’s a good idea to hold on to the most recent seven years. Anything older, you can shred.

  4. Keep forever: Essential records like your birth certificate, Social Security card, and estate planning documents should always be kept somewhere safe.

Once you’ve got a stack of papers to get rid of, make sure you do it securely, ideally by shredding them. While you’re cleaning up, sign up for e-statements as well. That way, this task will be a lot easier to complete next year.

Spend Your FSA Funds

Floating eye glasses© Getty Images/Flickr RF Floating eye glasses

If your employer-sponsored flexible saving account (FSA) has a grace period, you generally have until March 15th to spend whatever is left in your account from 2016 (up to $500). And for all 2016 expenses, whether incurred before the end of the year or during the extended grace period, you have until the end of March to submit those for reimbursement.

You can use an FSA to save on your healthcare expenses, because you can put money into the account on a pretax basis. The funds can then be used to cover costs that your health insurance does not cover. 

The list of IRS-approved items you can buy with your FSA money ranges from acupuncture to X-rays. Scheduling last-minute doctor appointments or buying new glasses or contacts is another easy way to use up leftover funds. When in doubt, head to FSAStore.com and shop from its list of eligible items.

Update Your Personal Property Inventory

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Unlike investing for retirement, your homeowners insurance isn’t a set-it-and-forget-it kind of financial task. It requires upkeep, and one of the most important things you can do is keep an updated list of your insured personal property.

This financial to-do list task might be best left until you’ve finished your spring cleaning, but set aside some time this month to wander around your home, filming its contents on your smartphone. It’s the easiest way to create a comprehensive inventory for your homeowners insurance. Don't forget to film inside drawers and closets as well. 

If you have time, use the video to create a list of your items and their value. If you can’t be bothered, store the video clip somewhere safe so that you can access it if you need it. Hopefully you won’t need it, but if you do it’s a lot easier to file a claim if you can see your valuables.  

Consider Buying Flood Insurance

BOULDER, CO - SEPTEMBER 12: The basement at the Roy's families home on Premier Place in north Boulder is flooded with about three-feet of water, September 12, 2013. Massive flash flooding is on going along the Front Range of Colorado.© RJ Sangosti/The Denver Post/Getty Images BOULDER, CO - SEPTEMBER 12: The basement at the Roy's families home on Premier Place in north Boulder is flooded with about three-feet of water, September 12, 2013. Massive flash flooding is on going along the Front Range of Colorado.

April showers are right around the corner, but heavy rain isn’t the only reason you might need flood insurance. Melting snow, hurricanes and mud slides are a few examples of natural disasters covered under a flood insurance policy, rather than your homeowners insurance.  

Even if you don’t live in a high-risk area, you still may want flood insurance to protect your home against potential damage. According to the National Flood Insurance Program, 20 percent of flood insurance claims are filed by people who live in low-to-moderate risk flood areas.

Annual premiums for federal flood insurance cost $700 on average, but in a low-to-moderate risk area it could be even less. The actual amount will vary based on your home's flood risk and the type of coverage you choose. There’s a 30-day waiting period before the policy is activated, so it’s a good idea to do this well before you think you may need it.

Budget for Summer Travel

Relaxing on Vacation© Jared DeCinque/Getty Images Relaxing on Vacation

Chances are you already have a few ideas of where you might like to travel this summer. Before committing to a destination, put this on your financial to-do list. Research the cost of airfare and accommodation to determine if the trip is affordable.

If you find a good deal that is within your budget, then book away. But if you don’t quite have enough cash to cover your trip, don’t pull out your credit card. Consider creating a special travel savings account and contributing to it for the next few months.

One idea to save more: Open a Digit account. Such an account analyzes your spending and moves money from your checking to a savings account if it thinks you won't need the funds. That way, you can accumulate money even if you aren't really disciplined about it.

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