Organizing your finances can be an agonizing process. While you would probably like more money in your bank account, managing your money can easily become a brain-numbing endeavor if you have a large amount of debt, and your finances are in disorder. In fact, a study by the McGraw Hill Federal Credit Union found more than 36% of Americans spend between two hours and “half the day” on their personal finances or worrying about money.
Clearly, money is a dominant mental topic, so why not dedicate time to declutter and organizebills, debt and accounts so you can finally achieve peace of mind?
Here are five things to do when organizing finances successfully.
1. Leave Paper Statements in the ’90s
It’s happened at least once — your coffee table, dining table, maybe your living room floor has been littered with an assortment of paper, envelopes, ad mailers and other paper waste.
Thankfully, technological advancements have gone a long way when it comes to electronic banking. Instead of allowing bank statements and other important notifications from your bank pile up in a drawer or on a counter, sign up for electronic statements and notifications.
Banks and credit unions are making this option even more convenient by sending e-mail or text message alerts any time new information is posted on your online user account. Now the old dilemma of important bills getting lumped with junk mail is a grievance of the past.
2. Set Bills on Auto-Pilot
Speaking of bills not getting paid, for the longest time I resisted automatic bill payments when managing my financial obligations. The reason I was so stubborn about making life easier was because of my credit card bill. Each month, I’d typically pay off the entire balance, but on tighter months I’d adjust my monthly payments slightly above the minimum balance. Since my payments could possibly change, I didn’t want to commit to paying a fixed amount each month through automatic bill pay. That is — until I missed my cell phone bill two months in a row.
I thought I had a mental note of payment due dates pinned securely in my mind, but my system failed me. That’s when I knew that I had to automate my finances wherever possible. Now all my bills are automatically paid, and my checking account never has to endure another late fee again.
3. Don’t Get Complacent
Now that you’ve set up your easy bill pay system through scheduled automatic payments, it’s extremely important that you don’t let yourself slack off when it comes to verifying purchases on statements. Letting yourself slip by overlooking erroneous or fraudulent activity will cost not just your savings account, but also the agony of settling concerns with your bank or creditor.
I don’t go so far as to check in on my accounts daily, but I always perform a weekly sweep of all my financials to check on account balances, charges, deposits and interest rates.
4. Select Your Financial Weapon of Choice
Finding the right tools to help with managing your money and organizing your finances in general can be challenging, especially with the infinite resources available. However, when I asked others what they use to organize their bills and bank accounts, the overwhelming majority stuck by one reliable tool: Microsoft Excel spreadsheets.
It may not sound exciting, but creating an Excel spreadsheet that includes columns for your account numbers, due dates and amounts due can work wonders when you declutter and organize your money.
Ozeme Jeanne Bonnette of Tri-Quest Investment Advisors says she relies on this type of method to keep herself organized:
“This has been incredibly successful in keeping my money/budget organized… I never go a month without the list, and I have been doing this for about a decade,” says Bonnette.
If you’re not convinced Excel budgeting is for you, I’ve found immense success with money management websites such as Mint.com. Mint not only tracks your various account balances (including checking, savings, retirement, loans, etc.), but also tracks your spending habits by categorizing purchases. It’s interactive, highly informative, and can give you greater understanding of how you’re managing your money.
Tools like Mint also alert you when a payment deadline is coming up, or if there is suspicious purchasing activity on one of your accounts. At the end of the day, finding a financial tool that helps you save money by avoiding penalties and by catching fraudulent purchases allows you to always maintain an active awareness of where your money is going.
5. Okay, Hold Onto Some Paper…
So, I know that the first tip on the list says to put a stop to your paper trail, but certain paper documents should be kept in a safe location. Here’s a list of paperwork that should be kept indefinitely:
- Annual tax returns
- Deeds, mortgages and bills of sale
- End of year statements for investments
- Legal documents (birth certificates, marriage license, divorce papers, social security cards, passports)
- Home improvement documentation, photos of home repairs and receipts
- Receipts for major purchases (for warranty and insurance purposes)
- Wills and living wills
- Beneficiary directions
- Real estate certificates
- Automobile titles
- Current insurance policies
- Pension plan records
- Retirement plan records
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Sam DiSalvo contributed to the reporting for this article.
Last updated: Oct. 15, 2021