Is your financial paperwork a jumbled mess? If you answered “yes,” you’re certainly not alone. The good news is that there are many simple things you can do to better organize your finances now to start the new year on a positive note.
Now that we are in the position of being in midlife, it is even more important to be in control of our finances. Between regular bills, and paying off college loans for the kids, it is vital to stay on top of things and stay organized.
There are some months we are really good at keeping ourselves organized, others not so much. The important thing is to keep going, to constantly evaluate, and to stick with it. And remember why you are doing it. For us, it is to get us to our favorite vacation spot: Sandals Resorts.
Try Going Electronic To Organize Your Finances
If you haven’t already done so, one of the first thing to do on your quest to get organized is to consider going electronic. Once you perform the initial set-up and get the hang of it, it’s so much faster than organizing the “old-fashioned” way. Another great perk is the fact that organizing your financial records electronically takes up a lot less space.
The vast majority of banks, credit card companies, utility providers and other types of businesses already give consumers the option to receive their statements and bills electronically. If you’re not already doing this, now is the time to sign up. It’s typically fast, convenient and free.
When you aren’t given that option, there is a simple solution. Purchase an inexpensive scanner, which will then allow you to scan your printed bills and receipts into whatever software program you’re using.
BONUS TIP: Each month, download all your financial files onto an external hard drive. Lock the external hard drive in a fireproof portable box that you can grab n’ go in case of an emergency.
Mark this task on your family calendar each month and highlight in green highlighter (the green highlighter will remind you that it is a finance task).
Find A Filing System To Keep Your Finances Organized
Whether you want to go electronic or not, you need to come up with a basic filing system that’s easy for you to stick to and not get frustrated with. This works best when you coordinate your filing efforts with a calendar or organizer.
The first thing you need to do is make sure you have a good filing cabinet. You can find ones out there that are functional and not very intrusive. When you do, make sure you have room to expand.
There are several ways to set up a filing system. The choice you make is up to you. These methods include:
- Month-to-month (a good choice for those who don’t have a lot of credit card payments and other recurring bills). This is a great method if you don’t mind keep all the bills together in one file. I tend to keep a separate monthly one for medical bills, and then have everything else in another file.
- Color-coded (if you’re more of a visual person, color-coded files are probably for you). I know several people that swear by this method. Color coding is especially helpful in an emergency situation. If you need to leave in a hurry, grab all the files that are in red folders. Update them monthly and make sure everyone in your family knows where they are.
- Subject or category (use broad categories such as “credit cards” and “utility bills,” or create a separate file category for each company you pay). This is the method most people are familiar with. It is easy to tweak to fit your family’s needs.
BONUS TIP: Use Wasabi tape in different colors to create file tabs. Inexpensive and easy to use, the tape tabs can help you find what you need quickly. Plus, you can cover it with a new layer so you can reuse your folders if your method changes.
Don’t be afraid to evaluate your filing system once a quarter. If you find something isn’t working, try another method until you find the one that works best for you. After all, the goal is to organize your finances so you can keep track of them easily.
Don’t Wait Until The Last Minute
If you have the time and inclination, it’s better to open bills and other financial correspondence as soon as you receive it. Taking the time to file documents away, during the same session, makes things even more streamlined.
A bill organization notebook or a desktop file can go a long way to making sure you’re organizing your finances the right way.
After all, if you lose a bill, you can end up paying far more than you would have if you would have taken the time to open it immediately. Being smart with your money is also an important way to organize your finances.
The last thing you want is to wait several weeks to file things, only to spend hours transferring receipts and other documents from a huge pile on your desk or the proverbial shoe box to their (newly-appointed) proper location.
Now that you have some ideas on ways to organize your finances, you’re on the road to a tidier filing cabinet. Better yet, you can say goodbye to the frustration associated with digging through piles of documents to locate the specific financial information you need.
Decluttering Is The Best Thing To Do To Organize Your Finances
Do you really need that receipt for Christmas 3 years ago? Probably not. One of the biggest sources of clutter in your finances is keeping too much stuff. It is really easy to misfile items into the wrong year. Save yourself the trouble by getting rid of the paper items that no longer mean anything.
Check your local municipality for a bulk shredding day, and take those items over. You will be well on your way to organizing your finances by eliminating the unneeded.
Depending on your current state of disorganization, sorting things out may take some time. But, that’s okay. With a bit of due diligence, your financial records will be in tip-top shape before you know it.
Remember, it’s not how fast you get everything done. The important thing is, you’ll finally be able to easily find a receipt or bank statement right when you need it.