Organizing Your Finances

Is your method of organizing your finances to put everything on a spreadsheet? Or are you like my friend who takes a shoebox of receipts to her accountant? Or do you have a partner or spouse who manages this task in your household, and you don’t know the system? (That’s me.)

If organizing your financial documents is one of your last priorities, first, consider how important it is for you to have them in order. You are not alone when it comes to this issue. Keeping track of everything is easier than you may think.

For instance, do you have all of your financial documents in the same place, or do you have to hunt everything down? You’ll need to get your bank statements, receipts, credit card statements, and all other bookkeeping items gathered together. 

Think of this task as like organizing medical records. You need to know what you have, and where you can find it, in order to make sure you don’t overlook anything, like a bill.

I can tell you firsthand how unpleasant it is to have your water shut off because the water company did not receive payment. In this case, we paid the bill in time but the utility company did not credit our account. Our neighbor ran a hose from his house to ours so we had water until we could get the company to turn it back on.

Ever try to take a shower with water pressure supplied by a hose? I was so upset when I found out we had no water that I sat on my bathroom floor and organized my hotel-acquired shampoos and conditioners into separate piles. A little organization opportunity soothed me.

And consider the various ways you can pay bills these days. You can

• write a check
• have the bank pay your bill
• have your credit card charged

Go Electronic

If you currently rely on your bank and credit card statements sent to you by email, GREAT! With the U.S. mail less reliable these days, email service is a more attractive option.

Most banks offer electronic delivery access, but you need to ask how to sign up. What I love about the electronic method is that it doesn’t take up physical space.

But what if you don’t have that option for all of your financial statements and invoices, purchase an inexpensive scanner to scan the printed documents and receipts and keep them on your computer.

As a legal nurse consultant, you know how easy it is to drown in paper.

Choose a Filing System

Whether you decide to go electronic or not, you need to create a basic filing system that easy for you to use and stick to. For instance, what will the framework of your financial documents look like? Will you immediately file them when you receive them? Or, will you set aside time on your calendar to manage to file your financial documents?

There are several ways you can create a successful filing system. It’s really up to you.

Organizing Your Finances Examples

Month-to-Month

Monthly is a great choice whether you receive statements in the mail and pay your bills once or twice a month. Manually review, pay and file all paper documents.

If you have set up automatic payments with your banks, credit cards, utilities, etc., set time on your calendar to review the electronic accounts and file the e-statements, paid receipts, PayPal, and any other sources. Then, file those items to a folder on your computer.

Color Code System

If you are a visual person, designate a color for each type of account and spot your files at a glance. 

Subject or Category

For manual or electronic filing systems, use broad categories, such as ‘Credit Cards’ and ‘Utility Bills’, or create a separate file category based on each company you pay.

Don’t Procrastinate in Organizing Your Finances

If you have the time, it is a good practice to open bills and other financial correspondence as soon as you receive them. Taking the time to file the documents during the same session, makes things more streamlined. You’ll also have a system that makes it easy to keep track of deductible business expenses.

Note due dates for credit cards. The companies are unforgiving when it comes to charging you late fees. Your excuses of “I was away” or “I moved into a new house” work only a few times. My husband has tried these and they have limited effectiveness.

The due dates for my bills on my Google calendar trigger me to pay attention to them.

If you receive financial documents electronically, file those to your online file system at the time you open them. This way, they won’t be lost or overlooked as your email inbox continues to receive new emails. When you work with a remote accountant, as I do, the cloud storage files make it easy for her to manage my account.

It’s incredibly easy and streamlined when you develop a filing system for organizing your finances. Don’t wait or put off filing for weeks or months. It will only take a couple of hours to file everything once you establish a system. And when you are organized, filing your taxes will be so much easier.

Pat Iyer MSN RN LNCC is president of the Pat Iyer Group. She had to pay overdue fees on one credit card only once in the last 5 years.