6 Quick Tips for Organizing Your Finances
Do you ever find it hard to juggle your personal finances? I do. I keep having this awful feeling that I’ve forgotten to pay a bill or something. Those thoughts are a clear reminder that I need to do a better job organizing my finances. (See also: Financial IQ Test: How Healthy Is Your Budget?)
In case there are others in need of financial organization, I’ve included these tips.
1. Reduce Your Total Number of Financial Accounts
Most people could only dream about a situation where there they have one bank account, one credit card, and one brokerage. We’ve developed a complicated financial system where there’s a credit card for online, one for the gas station, and one for overseas. Then there’s the bank that gives high interest, the bank that gives cash back, and the bank that has minimal fees.
All this juggling and shuffling accounts gets too complicated. Get online and reduce your total number of accounts.
2. Amalgamate Financial Accounts into One Institution
Do you have a bank account at one place, a credit card through another company, and investments with a different brokerage?
Is there a bank or financial institution that will provide all those services in one convenient location? When you’re dealing with a single entity, the process of maintaining your finances is simplified.
3. Find an Effective Financial Tracking System
No matter how much you amalgamate and reduce your accounts, there is still the issue of tracking everything. Finding simple-but-effective personal finance software will allow you to easily track all of your accounts in one place. For over a year I’ve used Moneydance, and I’ve found it helpful to see an overview of my finances in one click.
4. Establish a Good Filing System
One of the biggest costs associated with financial disorganization comes in the form of missed payments. Just this week I found a bill on the fridge that was hiding under another piece of paper.
You can add a file for unpaid bills in your filing cabinet. However, if most of your bills are electronic, you can create a folder on your computer for unpaid bills.
One concern is that these bills might be buried, so you need to have a system for regularly checking both the physical and computer folders. You might consider setting up a computer reminder to be sure you are regularly checking the folders. So, for example, on the 10th and 20th of every month, you would open those folders and pay all those bills.
You could also consider setting up automatic payments, but there is also the danger that you might overdraw your account if you don’t properly monitor all your payments.
5. Keep a Regular Schedule
This one has been killing me lately. My wife and I used to sit down for 15-30 minutes once a week. At that time we would enter receipts into our budget, pay bills if necessary, and talk about any financial changes we need.
However, lately we’ve been out of that rut, and after a couple of weeks the pile gets so big, it’s intimidating.
Small, regular tasks are much easier that big jobs done infrequently.
6. Always Have a Notebook Handy
I have one in my car and one by my office desk. When I buy gas, I can record the information. When I think of a financial task that needs to be done, I can just jot it down to take care of at the next scheduled time to process payments.