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You Are Here: Home - Newsletters - "Get Organized" - Article

     Organize Your Finances


If you're like most people, your personal FINANCIAL records are most probably kept in less than "Good Accounting Practices" standards. For example, stashing old automated teller receipts, a stub showing what you paid for a pack of mints two years ago (cash, of course), 10 years worth of paycheck stubs and credit card statements -- paid and unpaid alike -- as well as a few tax forms, a stray paper clip, and a penny, all shoved in the same place. Anything from an old shoebox to a toolbox would do you for this method of personal financial tracking but you can do BETTER than that. Not to worry. Here's how:
CARVE OUT A SPOT IN YOUR CALENDAR

Plan for a few HOURS of "alone time" with your financial records. This is a dandy time to pack the kids off to the mall, put up a pot of excellent coffee and a little snack (preferably chocolate), as a treat when you're done. Just make sure you won't be DISTURBED or distracted in the middle of your project -- this is going to take some concentration.
SPREAD OUT

Give yourself ample space to spread out all your stacks and PILES, such as a large dining room table. Make sure you have enough organizing SUPPLIES close at hand:
  • sticky notes
  • file folders
  • a tub to hold them with hanging file folders
  • large envelopes
  • a check file
  • ring binders
  • a three-hole punch
  • an open stacking file
  • an organizer/sorter
Also, a TRASH can by your side is a must.
BRING IT ALL TOGETHER

Get everything from everyplace around your house -- shoe boxes, check files, file folders, etc. You need to see it ALL in perspective to be able to really work out an effective financial system. And you don't want to do a ton of work, set up the perfect solution, then find that you FORGOT a whole banker's box of receipts from the guest bedroom!
ASSESS THE SITUATION

While enjoying your cup of coffee, make a game PLAN. Decide what you're going to put WHERE: e.g., checks and statements go in a specific file for checks and statements, credit card statements can be unfolded and placed in a file folder, investment statement get hole-punched and put in a binder, etc. Don't make it up as you go along -- this will only slow down your progress. Knowing in advance exactly what home you have assigned each type of document will make the sorting process fly by!
MAKE YOUR PILES

Start sorting on the table -- breaking your mass of financial paperwork into meaningful CATEGORIES. Checks go here, receipts go there, paycheck stubs go over there, paid bills go on the other side, etc. until all the "stuff" is divided into neatly organized piles. Use POST-IT notes to mark what-goes-where on the table to avoid confusion.
CLEANING OUT

Go through each stack and sort your "stuff" into paid and unpaid -- if it's unpaid, put it to the side to be acted on. Now, go through the paid piles and ruthlessly PURGE. If it's not something you need for legal reasons, something you might have to produce if you have a dispute with your credit card company or need to invoke a warranty, ask WHY you are keeping it. It's perfectly okay to toss the receipt for those mints from two years ago!
PUTTING THINGS AWAY

Once you have pared down, put the rest of the paid INACTIVE items in the envelopes, file folders, check files or other storage devices that you have purchased -- if you still need some solutions, check out your local office supply store for ideas that are interesting and functional. LABEL each in a way that makes sense to you -- by the type of bill, the month in which it was paid, or whatever system clicks in your mind and will make it easy to locate that item again when you need it.
CURRENT TO-DO'S

Have another cup of coffee and tackle the ACTIVE, or open, items. This includes unpaid bills, unreconciled accounts, and any items that you have a problem or question to clear up with the company. If you can sit down and pay all outstanding bills now, great! If not, decide what you're going to pay and WHEN and put them on your calendar then file the paperwork accordingly. If you have an open stacking file, you will find one with four compartments (one for each week of the month), very handy for this purpose. Also, if you haven't already, balance your checkbook. Now.
A PAT ON THE BACK

Enjoy your chocolate after putting everything AWAY where it belongs and, oh, by the way, check the calendar for when you'll be doing this again next month. Of course, next month this will all be done much FASTER.
A FEW EXTRA TIPS

I highly recommend using TECHNOLOGY to make this much easier and faster. Programs like Quicken and Microsoft Money will help. Really any spreadsheet program will do. Also, have a category for each life area you spend money. Once a week or month take your receipts, checkbook records and scribbled notes and record where you spent ALL your money....every penny. One of my students was shocked to find out he was spending $75 per month on orange juice! Legend has it that the Rockefeller boys kept track of all their spending and they turned out alright. This time next year you'll wish you started today.

 

Leo Quinn Jr. is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. Visit his website at www.LeoQuinn.com.


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