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Simplified financial trail good for you, your family

| Sunday, March 3, 2013, 9:00 p.m.

Weeding out unnecessary paperwork has obvious benefits: staying on top of bills and taxes, avoiding late fees, reducing exposure to identity theft and even making a grab-and-go exit easier in a natural disaster.

But it's not just about eliminating paper pileups. Getting organized can be a godsend to your family, said Claes Bell, senior banking analyst at Bankrate.com.

“A lot of people don't think about this, but if you or a loved one passes away unexpectedly, having account numbers, website log-ins and other key financial information in some kind of order can make it much easier on your (family),” he said. “Do you really want to burden them with the chore of cutting through your financial clutter?”

For all those reasons, here are a few tips on how to clean up your paper trail:

Less is more

If you have lots of different bank or brokerage accounts, you're generating more paper than you may need.

Unless you have a specific plan, such as better savings rates or laddered CDs, it can pay to consolidate your accounts among a few banks or credit unions, Bell said. Just be sure your combined deposits stay below the $250,000 limit for FDIC coverage.

Ditch extra credit cards

Getting rid of excess plastic can unclutter your wallet, as well as drop the number of monthly billings. And there are added benefits: “You won't accidentally make a purchase on a little-used credit card and then forget to pay the bill, which can mean big late fees and serious credit consequences,” Bell said.

But be careful. If you close too many credit cards at once, it can ding your credit score. Rather than closing the extra accounts, Bell suggests it might be better to cut up the cards, so you're not tempted to use them.

Switch to online banking

One obvious way to shed paper is to pay bills online.

Remember to keep track of payment due dates so you don't incur a late fee. And if you set up automatic payments, be aware of triggering overdraft fees if your bank account dips too low.

Online payments also can help protect against fraud, since you're not mailing or generating as many financial pieces of paper .

Overall, “it may be a drag to spend time organizing” your financial documents, said Bell, “but buckling down and doing it will save you time and money in the long run.”

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