How to Organize your Finances

Organizing personal finances is a behavior that every individual should stick to. It is the only way you will get to know where you stand as you embark on planning for your financial future. In order to organize your finances, you will need to do most of the following:

CREATE A LIST. Have a list of all your financial information such as account numbers, access codes, due dates on credit and loan accounts, payee addresses, contact information, etc. This will make it easy for you to quickly find out what you need, without having to dig through a whole lot of papers.

USE THE COMPUTER. A computer is a useful way to have your finances organized. If you own a personal computer, create a folder containing all the useful information. Be sure to protect it with a password in case someone uses your computer. Also, create a spreadsheet with all your financial information, which you can keep updating whenever you review your finances.

USE FOLDERS AND FILES. A folder with all the necessary financial documents, such as tax documents, insurance policies, account agreements/disclosures, etc. Each category of documents needs to be placed into a separate file inside this folder (Banking in one folder, insurance in another, and so on). You can also categorize them into those that you need to access more frequently and those you rarely use.

SET UP AUTOMATIC TRANSACTIONS. Technology has made it easy to organize our finances through automatic transaction services, such as direct deposit, automatic bill payments, as well as automatic savings. In other words, you can earn, spend and save without ever touching any cash money or writing any bills. Most companies accept electronic bill payments, so why not sign up and set up automatic debit from your account, so you will not have to worry about a bill’s due date and the associated paperwork. And if your employer participates in direct deposit, it is another great future to utilize. Also, check with your bank to see if they can set up an automatic savings plan for you.

ONLINE BANKING AND/OR BILL PAY. If your bank or creditor offers this option, take advantage of it. You can check all your transactions online whenever they post. Some banks even offer electronic statements, and this can help you get rid of most paper statements in the mail. In addition, if bill payment is available, it is a useful way to pay your bills online and on time, while also keeping you more organized.

CHECK YOUR FINANCES MORE OFTEN. Take some time to continuously monitor your transactions as they post. By so doing, you will know exactly where you stand financially and also identify errors (if any) immediately. This way, you will not have to worry about spending so much time remembering every transaction on the statements at the end of the month. In fact, if you have been keeping track, the only item you might need to check on your statement is your balance to make sure it tallies with your records.

CONSOLIDATE YOUR ACCOUNTS. Having multiple accounts can sometimes get confusing for most people. So, instead of having a whole lot of open accounts serving the same purpose, why not consolidate them into those you can easily manage? For instance, two credit cards and two bank accounts should be enough.

SORT AND RECYCLE OR SHRED WHAT YOU DON’T NEED. Sort out your paperwork as it comes in. Keep the ones you need to and recycle what you don’t need. If it contains personal information, shred it. Keeping unnecessary stuff is the cause for disorganization because you will not easily find what you are looking for. Sometimes you could have a bill that is past due and you don’t know because it is in a pile of clutters.

 BUDGET. It is difficult to organize your finances if you don’t know exactly where and how your income is being spent. This is when a monthly budget becomes essential. Having all your expenses listed down will help you determine where you need to cut down and save some money.

PAY BILLS AS THEY COME IN. Instead of piling up your bills and waiting for their due dates to get closer, just go ahead and pay them (if you have enough funds in the bank) so you know this is taken care of.

CREATE A CALENDAR AND REMINDERS. Have a calendar with all the due dates, so you will never be late on any item. Set up reminders ahead of time (way before the due date, so you will not be late).