Have you ever missed paying a bill on time because your statement was misplaced? Do you have unread mail and miscellaneous paperwork piled around your home? Have you been meaning to clear away the clutter, but just haven’t made the time?
With spring just around the corner, many of us have cleaning on our minds.
“It is estimated that getting rid of clutter would eliminate 40% of the housework in the average home.
- National Soap & Detergent Association
Now is the time to get organized!
Three Steps to Organizing Your Personal Finances:
1. Track Your Monthly Budget
Keeping your finances in good order is one of the key components to reaching your goals.
Part of Nithman Financial Group’s financial planning process involves completion of a personal monthly budget worksheet. The ledger contains categories for bills, living expenses, charitable donations, income, etc. The first column has space for “projected monthly expenses.” The second column is for “actual monthly expenses.” The process of projecting and identifying actual income and expenditures can be an eye-opening practice. Our clients are often surprised by how much they actually spend in a specific category.
Whether you love buying jewelry or custom car parts, maintaining an awareness of how much you’re spending on lifestyle items can mean the difference between reaching your goals and petering away your future retirement income.
Are you aware of how much you spend each month?
There are many online applications available to assist you with tracking your monthly budget. Use technology for your benefit, and automate your budget tracking process. Click HERE to read our review of Mint, a popular personal finance app.
2. Establish and Maintain a Filing System
Organizing your bills, tax information, professional contacts and estate planning documents is a worthwhile endeavor. Creating a system now may save you and your loved ones time and energy when you need it.
"The average American business person loses six weeks a year searching for lost or misplaced articles from messy desks and files.”
- Wall Street Journal
Purchase a fireproof lock box from your local home improvement store. Obtain hanging file folders, envelopes or a binder with tabs. File important documents such as mortgage contracts, automobile titles, birth and marriage certificates, tax return information, and copies of charitable donations.
Purge non-essential items such as outdated account statements, bills and receipts. Loose papers can become cumbersome to sort and store. Erroneous paperwork may be confusing and burdensome for loved ones when you pass away. Stay tuned to our blog for a full list of documents to keep and to shred, complete with timeframes.
Keep a location log of your account passwords, bills to be paid, professional and emergency contacts, medications, safe deposit boxes and estate documents. Share the log’s location with someone you trust, so they will have access to pertinent information in case of emergency.
3. Go Paperless
Setting up electronic delivery and online bill pay can save you money, help keep your finances organized, and can be more secure than traditional mail service.
“23% of adults pay bills late and incur late fees because they can’t find their bills.”
- Harris Interactive
Check with your financial institution for information on online bill pay. Many banks and credit unions offer online bill pay free of charge. This service allows you to track and pay all of your bills in one place. You may schedule payments at your convenience – day or night. Submit electronic payments to businesses or have your bank send paper checks to a person, such as your cat sitter. Save on postage fees and the trouble of going to the post office.
Many utility, investment and life insurance companies offer electronic delivery as well as access to your archived documents. Gain immediate access to invoices, account statements, and tax documents. Take advantage of performance-related graphs and charts. Set up payment reminders.
Re-schedule invoice due dates to be paid at convenient times throughout the month. If you mortgage is due at the beginning of the month, set your credit card and phone bill to be due around the 15th.
Consider saving non-essential documents in the cloud. Online docs may be accessed more quickly than paper copies, as digital files are searchable by key-word. Plus, no paper to store.
Bottom Line:
Committing as little as five to 10 minutes per day toward organizing your finances can have a positive impact on your life. Don’t get overwhelmed. Break out goals into small bites. Focus on one task at a time.
If you don’t need it, don’t want it, or don’t use it, get rid of it now! Freeing yourself of unnecessary “stuff” can actually make you feel lighter.
Let’s discuss lightening your load as you journey toward financial success. Get more out of life with less.
