Organizing Your Personal Finances

Organizing Your Personal Finances

Getting your personal finances organized isn’t fun or sexy, we know. But it’s the best way to track your money and to make sure you’re saving, spending and investing within your means and along guidelines that will bring you the best financial health.

We can’t make it more pleasurable, but we can help you simplify the process in order to get a handle on your finances and make sure bills are paid on time, you’re putting a bit aside for the golden years and you’re not maxing out the credit cards.

Write it down. Unfortunately, tracking your spending in detail is the first step, and often the hardest to take. There are a couple of ways to simplify:

  • Carry a notebook. This way you can write down what you spend and when.
  • Use software like Quicken. Some banks also track and break down your spending habits for you so you can see where your money is going.
  • Plastic, not paper. If you never carry cash [or budget a small amount to keep on hand for emergencies] and instead use a debit card for every purchase, you’ll have paper receipts plus a bank record to show where every penny goes.

Reduce and consolidate. If you can have all your bank accounts at one institution, and your major credit card and your investments too, your financial information will be streamlined and more easily accessed and cross-referenced. Also, make sure you are not opening unnecessary credit cards and that you don’t have three or four savings and checking accounts open and forgotten that you can bring into your main accounts.

Establish a permanent home for bills and financial info ONLY. Set up reminders to check your bills file — whether it’s a folder on your computer for ebills or a manila folder on the desktop for paper bills, or both — so you aren’t missing payments. Get a filing cabinet if you don’t already have one and create folders for receipts, medical bills, utilities, and tax information, as a start. Whichever process you determine works best for you, make sure you use it only for finances and that all your financial documents land there.

Dedicate time to the task. If you know you have bills due clustered around the 10th and the 28th, for example, then five days before each date you should be setting aside a half-hour to an hour to go through your financial paperwork and get the bills paid, review statements and enter information into any tracking software you’ve chosen to use. Even better, perform these tasks once a week in the evening — you’ll find you’re spending less time on reviewing your finances so you can enjoy what you’ve been spending your money on!

Once you’ve tackled these steps, you’ll be able to see where the bulk of your money goes, what your wasteful habits are and how to become more thrifty so you can achieve the financial goals you’re now ready to set for yourself. Building a budget and sticking to it will enable you to amass that down payment, increase your savings or investments or ensure the credit cards get paid off. Now that makes good financial sense