You know how that rack next to the door finally solved your family's problem of draping their coats all over the kitchen chairs? Or how that toy bin in your five-year-olds' room allows you to hide his mess away in about two minutes when someone pops by unannounced? What if you could do this same kind of thing for your finances -- create simple solutions that help you stay organized, permanently? Actually, you can.
After you've de-cluttered you financial life, here are five great ways to stay financially organized this year.
1. Buy a file cabinet -- and use it well
This might seem like a "duh" but few of us actually do it. So this year, bite the bullet and buy a file cabinet for your home. Then create the following files:1) Automobiles For your auto lease or loan, purchase agreements, titles, warranties, maintenance, insurance and repair paperwork and receipts. 2) Bank statements 3) Children For school reports, activities and any other records worth keeping. 4) Credit cards (all statements) 5) Health and Life Insurance For policies like health, life and disability, etc., and all health insurance claims statements, reports from doctors and tests. 6) Home For your lease or mortgage and closing statements, other purchase documents, and insurance - renters insurance, private mortgage insurance, homeowners insurance, etc. 7) Investment accounts (excluding retirement) 8) Retirement (all retirement account statements) 9) Salary/income For pay stubs, checks, and other payroll items, other sources of income. 10) Student loans For original loan agreements, monthly and annual statements. 11) Tax returns For W-2s, 1099s, tax-related forms and IRS correspondence, and if you plan to itemize deductions, relevant statements and receipts. 12) Other loans/debts For all other kinds of loans, statements of money owed, etc.
By doing this, tax-time will be much easier (and faster) next year -- not to mention you'll have a full picture of your financial life right at your fingertips. Be sure to purge your files at least once a year, for example, by throwing away monthly statements if you receive a year-end summary.
2. Create a "reminder system"
The cable bill is due one week, the mortgage the next, the electric the next. That's all hard to keep track of -- but if you don't, you'll end up paying late fees. So take an hour or so of your day today to create a "reminder" system for the rest of the year. Go through all your bills and see when they're due each month. Then create an online calendar (I use a Google calendar, but an Outlook calendar or some other online calendar will work as well) that will send you automatic reminders on certain days so you'll never forget to pay a bill again.
3. Organize membership and rewards programs
If your wallet is anything like most people's, you've got so many membership and rewards cards -- for grocery stores, drug stores, clothing stores and more -- hidden in there that you've probably forgotten about some of them. And that means you're losing out on big savings each year. To get those cards organized, consider using the Card Star app on your smartphone. You simply insert each rewards or membership card into the app (you can type in the membership number or scan the barcode to do this) and viola, you have all of your cards in one place (and a far more organized wallet).
4. Combine bank and retirement accounts
Do you have multiple individual retirement accounts (IRAs) or 401(k)s from old jobs in a bunch of different accounts? That can get confusing and makes it harder to make sure you're diversifying your investments and keeping on track for your long-term goals. So help yourself better organize these accounts by rolling over old 401(k)s or 403(b)s to an IRA, and consolidating multiple IRAs into a single IRA. You can compare IRA providers at IRAmarket.com.
5. Do weekly financial "recaps"
To stay organized throughout this year, it's important to set aside 15-30 minutes each week to review your finances making sure no bills fell through the cracks, that you've filed away all paid bills, and that you're on track with your savings. If you're married, do this recap with your spouse each week.
These five tips can help keep you on top of your paperwork and feeling better organized all year. What do you do to keep yourself organized online and off? Is a clunky file cabinet a step too far for you?
By Catey Hill, contributor at IRAmarket.com
(Image: "Business Woman" image via Shutterstock)
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Eff the reminder system (#2); take an hour or so to contact whomever you pay monthly and have them change the billing cycle so all your bills are due the same time of the month (or break it up into two times if you can't do it all at once). I only pay bills on the 1st of the month. Nothing gets skipped or paid late and I don't have to deal with it more than once.
yeah I don't love the reminders idea, I just have a budget that is set up based on our pay cycles, monthly. I update it weekly at least. I've organised it so that the bills are paid on time by assigning them to the appropriate paycheque in the cycle. Budgeting is actually the first step of being financially organised, imo
I had this idea stuck in my craw that I needed a "file cabinet" and that really I had outgrown my tupperware style file box. My husband and I did a giant purge of old paper work one weekend (it was painful) and set up a new folders similar to those suggested above. It's actually not that many folders. With the ability to store so many files electronically, there are only a handful of documents your really need the hardcopy of.
So I was happy that we could pare two file boxes down to one file box with plenty of room to spare and save money by using what we already had instead of buying something new.
I feel it's much simpler to (1) go paperless - it's green, you won't need a cabinet, and you can find any statement online quickly, (2) set up autopay - fortunately I have most charged to my CC w/o any convenience fees and I can earn points just for paying my bills, (3) monitor all my accounts using a free personal finance tool like Mint.com, and (4) toss out all those annoying loyalty cards and just use my phone number instead at checkout.
I agree with the above comment on going paperless. I am moving at the end of the month and plan to get rid of most of the paper and use my scanner at work (It's super fast & easy to use!) But I like the idea of setting up a "virtual file cabinet" with the same headings in #1. You can even keep it in "the cloud" with Gmail, or other web based email with large storage.
Overall, I agree with the folder system outlined above. I have two additional folders: one for appliance manuals and another for legal documents I need to keep indefinitely, although not everyone has a need for the latter.
I keep my files in two file boxes, one of which is sized to hold legal-sized documents. I clean out documents that are more than year old, either at the end of the year or after I finish my taxes. I just keep the two plastic boxes in my closet. This makes them easy to move, which I do often, and keep out of sight. The system has worked well for me for 12 years.
I dream of going 100% paperless. But I’m wondering if you have to maintain original documentation (paper) for things like mortgage paperwork, divorce records, etc. And are scanned receipts considered “original” documentation?
As you get more established (ahem, older), so-called critical paperwork seems to increase exponentially. I feel like we are drowning in it.
I have an APP on my phone called "Keyring" ... I scan all my club cards to it thereby eliminating the need for 6,423 cards on my keychain, or in my wallet. This APP often times has special offers direct from the retailers as well.
I also have an APP called "Paper Karma" to which I scan all unwanted mailers and flyers. Paper Karma then make arrangements to have my contact information removed minimizing my junk mail.
I keep original important documents (deeds, insurance policies, my Will, and such) in a safe deposit box with copies of everything scanned onto a jump drive for easy access. Also on that jump drive is the contents of my wallet, any bank account information, and copies of past tax returns. I keep it hidden in a special place and only 2 people are aware of its existence ... in the event of an untimely demise, don't make your family have to put together the puzzle pieces of your life.
And, much like "Beckestra" above, I have condensed all "necessary to keep around" documentation into 2 small file boxes (my pet's records, my car records, health records, etc) that can not only be accessed easily, and moved around easily.
Oh ... and I am undoubtedly OCD ...
I second the Mint.com recommendation! It makes it so much easier to keep track of things, especially across multiple accounts!
Thanks for the info on Card Star -- just downloaded it and removed a 3-inch thick stack of cards from my wallet. :)
Instead of a filing cabinet, I have a series of matching expanding file folders, each with a topic (and color) much like the subjects suggested... much easier to just grab the purple "Taxes/Income" folder come tax time, or the red "Medical/Critical Documents" folder in case of emergency. Also much easier to move, which we've done a couple times since I started my system. I keep them in a bookshelf so they are camoflaged and look tidy :)
What KK said. Cut half the stress out of my life (well, almost!).
I got rid of my big file cabinet, and moved to just a small two-drawer style (bright pink) that is stored in a closet.
I made a lot of things electronic. I agree with calling people to get billing cycles lined up. Everything is due the first week of the month for me. It just gets things out of the way.
Does everyone trust Mint.com with ALL your account numbers? Seems pretty cool, but I'm reluctant to hand that info over...
I am so excited about this small (ha!) project! I am usually very on top of our filing, but not so much the last couple of years. I moved all of our bills to auto-payments and have gone paperless for bank, utilitiy, credit card and cell phone statements/billing. I've consolidated all of our debt (my student loans and car loans) to a super low interest loan, saving a ton on interest. There's really not too much to file other than car maintenance/repairs, vetrinary records (the kids are all grown), property taxes & home owners insurance and investment quarterly reports. I think I can get rid of my two drawer file cabinet and move to a file box, and that's exciting!!
One question, where do you keep your permanent files? Birth certificates, marriage license, passports, divorce papers? I keep mine in a "forever-file", but should I move these to a safe deposit box like janellerene?
@ redthread I use Mint.com (switched from Quicken) and keep it password protected.It holds all of our financial information and works like a dream across all of my devices. I highly recommend it.