Organize Your Finances in 4 Steps
Every minute you spend looking through clutter, wondering where you put this or that, being unable to focus because you're not organized costs you: time you could have spent with family or friends, time you could have spent being productive around the house, time you could have spent making money.
Overhauling your budget is great, but you have to get organized, as well. If you go about it the right way, it'll be painless.
Here's your plan of attack:
Step 1: Get the Tools You Need
Step 2: Dig In
Step 3: Start Sorting
Step 4: Stay on Track
Label your hanging folders according to your needs, but I like to use these categories: home and auto; healthcare and insurance; saving and investing; income and taxes; and credit cards and other debts. Then you can use file folders to sort subcategories. Let's say you have two credit cards; you'll want a folder for each. Start fresh every year.
If it's sitting in a pile on your kitchen table, move it to an area that can be messy for a little while. This can take anywhere from several hours to several days depending on how much stuff you have to plow through and how much time you have to devote to the process.
Take statements and bills out of their envelopes. If you find a bill that needs to be paid, do it on the spot, says Monica Ricci, an organizing expert and author of Organize Your Office in No Time. "Paying bills as they come in gets them off your plate physically and mentally," Monica says.
Bank, insurance and brokerage statements should be filed in their folders. Consider getting a shredder to get rid of obsolete files with personal info and other papers you don't need. Then recycle.
Follow the 5 Ds to give your paperwork an organizational overhaul
Twice a year, give your system a once-over to ensure you're on track.
Find out how long you need to keep your financial paperwork