6 Steps to Get Organized For Financial Success
I am horrible at organization. My house is a mess. My filling system at the house is horrible. If you are like me, then we both have a big problem. The thing is, disorganization is a huge indicator of your financial life. The reason, if you can't keep your house tidy and organized, then chances are you can't keep your financial life very organized either.
If a person isn't organized financially a number of things can happen, they can bounce checks, exceed credit limits, pay bills late, get charged for stuff you didn't buy, be stressed over bills, go into perpetual debt (like most Americans), and even let fraud go unnoticed.
This is something, I have been making huge gains in over the last three years, but now I must get all of my life organized, otherwise I could easily fall back into the same trap again, despite my new knowledge. So, here are some tips that I have learned to help us all become more organized both personally and financially.
- Filing system
- Take care of the mail when it arrives
- Use a computer and accounting software for your records
- Pay bills on a specific day
- Balance your checking account
- Create a list of all bills and debts
We must have a filling system. The problem is, I have started this before, and then end up laying stuff down, and saying, "well I'll file it later." As we all know later never comes. It must be dealt with then and there or it piles up and then ends up getting lost. Not very organized then is it?
Everything must have a place.. The basic filing cabinet is the best way to organize the paperwork. If you don't have a filing cabinet, get one and some file folders to.
Create a file for every single bill and bank account, for example, mortgage/rent, electric, cable TV, water/sewer, health clubs, checking account, savings account, cash receipts, etc. For credit cards, I name the file by the bank name and the last four digits of the card number, i.e., "Citibank 1234." Although, you really shouldn't have more then one credit card. Better yet, as Dave Ramsey says, none at all.
Finally, get a mail box (desk organizer) for the top of your desk. Label it "unpaid bills" and keep your statements in this box, until you can pay them. Then move them to their appropriate file folders.
When the mail arrives, open it and take care of then and there. Don't let it pile up. Again, the attitude of I will take care of it later, is simply procrastination, and never happens (later never comes).
If it's junk mail, run it through the shredder and discard into file 13 (or better yet the paper recycling bin). Bills, are opened, and placed in the unpaid bills box on your desk, with the frivolous inserts and any other trash portions (like the envelope they mailed the bill in) run through the same shredder that the junk mail went through.
Then on your assigned bill paying day, for me it's each of my 26 paydays, sit down and pay each of the bills. For me I use my credit union's online bill pay system, so I save the money on the stamps. Plus I find it more simple, and I have an electronic record of every payment, if I need to look back. The system even tells me when the payment cleared, should there ever be any doubt.
The use of a checkbook register was/is fine and dandy, but in this modern world, there is a much better (and more accurate way), to keep your accounts balanced. It doesn't mater, if you use quicken, Microsoft money or another program, the simple fact is that you use it and diligently update it with any and all new information. The software will add it all up for you, so as long as you inputted the right numbers, you will be given a correct balance. Sure makes things simpler. When you get the statements, take time to go to the computer and balance your records with the banks records. If there is an error find it. Was it your error, or the banks. If it was the banks, notify them ASAP, so that they can begin their own investigation.
One thing though, be sure to backup your data onto another desk (each and every time). Also print off the information at least once a month so that you have a hard copy as well. Staple these with the bank statements, so it is all together.
AS I mentioned above, have a specific day to pay your bills. Personally I get 26 paychecks a year. The Tuesday, that I am paid, I sit down and pay my bills.
Finally, carefully record each transaction into your computer software, so that you have a balanced checkbook register.
As I have already mentioned, balancing your checkbook is very important. If you don't, you will not know how much that you have to spend. Thus you probably aren't saving anything either.
Scott Bilker, author of Credit Card & Debt Management: A Step-By-Step How-To Guide for Organizing Debts & Saving Money on Interest Payments suggests keeping a list (on one sheet of paper), listing all bills, debts, due dates, contact phone numbers, etc. He believes this task is one of the most powerful tools for your (and my) financial success. Oh, and each time a bill is paid, it needs to be updated.
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