3 Steps to Organize and Track Your Finances Without the Hassle

by Sarah Winfrey on 16 October 2009 13 comments

When it comes to money, there's a lot to track, especially if you're doing all the right things. It starts out simple enough, with a checking account and maybe one for savings, too. But pretty soon you've got a credit card or two (or three or ten!), retirement investment accounts, other investment accounts, savings accounts for different goals, school loans, home loans, and more! It gives me a headache just thinking about it.

But doing the right things with your money doesn't have to be overwhelming. You can simplify your financial life just like you can simplify any other aspect of your life: by removing clutter, imposing order, and consistently putting things back where they belong.

Remove the Clutter

Money clutters our lives in a million ways. From the statements that fill our mailboxes and inboxes to the myriad of choices we have for each sort of account, it's amazing that we all don't just give up and walk away. If we're going to know where our money is and how it's working for is, we need to eliminate some of this fluff so we can see the true state of things.

To declutter your money:

  • Choose whether paper or electronic statements work best for you and sign up for only one method of delivery
     
  • Choose one time every week or month to spend on "money stuff." Don't look at anything financial, whether it's a statement, bill, or something else, until then.
     
  • Pick one or two credit cards that work best for you. Consider interest rates, perks, and where you can use your different cards. Whether you cancel the other cards or not, stop using them unless there's an emergency.
     
  • Consolidate locations as much as possible. If you can have all your checking and savings accounts in one place, that will be easier. The same goes for your investment and retirement accounts. Even if you don't consolidate entirely, having some accounts together is better than having each one with a separate institution.

Impose Order

Now that you've gotten rid of some of the extra clutter in your finances, things should look a little clearer. To help keep them that way, set up some structures in your life that will help keep your finances in line.

To impose order:

  • Track your money one way. Whether you use an online tool, like Mint.com, or software like Quicken, or you have a pen and paper way that works for you, do it. But try to avoid having more than one system going at a time. Make sure that the system you set up can handle all of your balances AND is something you're comfortable with.
     
  • Keep all of your money stuff in one place. This can include receipts, bills, statements, your checkbook, a calculator, and anything else you need to track your finances. Get your whole family used to depositing their receipts or any financial mail that comes in this place, so it will be there when you're ready to look at it.
     
  • Consolidate your due dates. Many credit cards, lenders, and other companies that bill you, can be flexible with when your bill comes due. If your due dates are scattered all over the place, talk to these companies to see what you can do about making them all come due at once, or a couple of times a month, so you're not constantly trying to figure out what needs to be paid next.
     
  • Find a method. Decide whether you're going to pay bills once or twice a month, whether you need to track spending weekly or if monthly is acceptable, etc. Write down your plan, and stick to it. Don't look at your money the rest of the time.

Tidy Up

Now that you're rid of the clutter and what's left is in order, all you have to do is maintenance work to keep it that way. If your efforts at decluttering were successful and your structures are good, this work should be minimal.

To tidy up:

  • Follow your plan. If you say you'll sit down for 30 minutes every week to assess your current financial situation, do it. Set up some reminders for yourself, whether it's time scheduled in your calendar to alarms on your phone.
     
  • Make sure your tracking is working. Be sure that all your important transactions are, in fact, getting tracked and that everything is consistently working the way it should. After the first couple of months, you won't have to do as much of this, but it's especially important at first.
     
  • Evaluate your method. After you've worked with your new structure for couple of months, decide if it's good for you as is or if there are some things you want to change. You can tinker with the details as much as you want until you find what works for you.
     
  • Make anything new fit into the plan. If you open a new investment account, try to use a company you're already working with. If you have a new bill, try to make it due at the same time each month as your current ones. Don't let new things take you back to that place of clutter and disorganization

Money doesn't have to be difficult and frustrating to tackle. If you can get your financial affairs simplified, organization is easy and you'll always know where your money is.

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Guest's picture
Robert

Removing the "clutter" is probably the best tip in finances and in life in general. Great post.

Sarah Winfrey's picture

Thanks, Robert. And there are a million ways to reduce financial clutter . . . these are just some of the ones I've seen work best in my own life and the lives around me. Clutter sucks!

Guest's picture
Clf

"Choose one time every week or month to spend on money stuff. Don't look at anything financial, whether it's a statement, bill, or something else, until then."

This goes a long way to reduce stress, and the less stress you have the better your decisions will be for finances and everything else.

Guest's picture
Guest

Okay . . . so what does one do with ALL the prospectus staff we get with/about investments? Right now, we get it via mail. I don't want it on-line as there is way too much stuff there already to keep track of. Since I don't understand it, I don't read it, file it, or keep it. I may regret it one day but I think all the paper is a waste of good trees.

Guest's picture
CB

After reading a tip about paying a bill as soon as it arrives (and I use easy on-line banking), life has become simpler. I use a three-ring binder to organize bills by month.

Paying as soon as the bill arrives means that I don't leave open the possibility of late charges, just because I become too busy to pay the bill.

I also strive to have as few bills as possible. Some bills are deducted directly from my bank account. I use my debit card and only one credit card.

Guest's picture

It is very interesting post! I like the idea of "Choose one time every week or month to spend on "money stuff." I should do this.
It will give me a full greasp of my financial situation.

Cheers

Guest's picture
Olivia

Great ideas, and they do work. Antother helpful thing is a yearly evaluation of finances. (We do this about the time we learn if my husband is getting a raise of not.) Do the budget categories work, can we skim a bit to get more into savings, do we want to eliminate or add categories, are we moving forward? It takes a chunk of time, but is well worth it.

Guest's picture

Thanks for the tips. You have provided some very concrete advice.
I wish i could wave a magic wand to make it all happen! I have found that moving from paper to electronic statements has been one of the great ways to reduce clutter.

Guest's picture
HollyP

I don't understand my prospectus either. I do save them for a year in a file, by company. When the next year's (or next quarter's, for the quarterly stuff) I discard the previous one. That way I have it, just in case I suddenly figure out what I should be doing with it.

Guest's picture
Guest

as to the "bill paying" part:
our plan is very simple... three piles
#1 unopened bills
#2 opened bills
#3 paid bills

as snowbirds, we don't use online, as it gets too confusing with address changes etc.

our accounting system is also simple... a simple net asset spreadsheet, kept on Google Docs.
Two main asset types 1. Liquid 2. non-liquid:
headings:
Interest bearing accounts by source with a last column that lists the date of last update.
Debt balances (same update date column)
List of physical assets with "mark to market" value
(cars, house, valuable goods)

Sarah Winfrey's picture

Whoa Nelly! Get sick for a few days and come back to a whole string of comments. But they're all great!

To the questions about prospectuses, etc., my tip would be to see if you can have to get them at all. Most investment compaies will let you opt out. If you're not going to read them, there's no point in piling on the guilt by continuing to receive them. If you want them around just in case, HollyP's idea is good, too--make sure you don't have too many of them at once, 'cause those suckers are huge!

I love the tips about evaluating your finances once a year and the details on the spreadsheet. Basically, the secret to decluttering is to find what works for you and stick it out, even when you don't want to. For me, it's all of those times I say "well, I'll do it later" that make for clutter.

Guest's picture

I will also recommend using e-tools such as Mint.com or Quicken. Here is my experience with them at http://www.mewithoutdebt.com/2009/09/quicken-and-mint.html

Guest's picture
Clayton

I find that staying on top of things is the hard part. It's like spring cleaning. I can go through my finances and clean house and stuff, but keeping up with it does get difficult. So I did my own thing. I pay almost all my bills automatically, I keep enough in my checking to prevent any cash flow problems, and check on my savings twice a year. The only thing left for me to do is get rid of all that dang paper showing up at my house.