The consequences of financial clutter
Fortunately, financial clutter can be cleaned up, and the payoffs — lower banking costs, less risk of identity theft, better financial planning and an end to the chaos — are well-worth the time and effort.
You’ve probably heard that being surrounded by physical clutter can make you feel mentally cluttered. Well, the same is true for financial clutter. And as we enter tax season, the results of financial clutter can be especially troublesome.
Financial clutter can block your progress toward a clear financial path, and the cost can be tremendous as well. The following are just a few ways clutter costs you extra money, time and stress:
- Unpaid bills: If it’s hidden under a pile of junk mail, it’s likely it’s not going to be paid on time. Late payments can hurt your credit score. Even worse, you might come home ready for a shower and there’s no water. After checking your pipes you realize you never paid your bill thanks to the clutter in your in-box
- Identity theft: That statement you accidentally threw in the trash without shredding is a criminal’s treasure. Say hello to a world of heartache when he opens accounts in your name. The process to clean up your credit record after identity theft is tedious and sometimes costly.
- Lost accounts: Sounds far-fetched? It happens all the time. Lose the paperwork and some people forget an account ever existed. Out of sight, out of mind.
- Inability to borrow: The dossier of documents a bank requires to loan money is tremendous. If you can’t locate what they need, you don’t get the money.
- Duplicate spending: You come home with a new purchase only to find you already have it. No surprise, though, because it’s been buried and unused for years.
- Stress: Being unaware of exactly where you stand financially is a tremendous burden. Searching in vain for your checkbook can seriously raise your level of stress.