Save Time and Money by Organizing Your Finances

This article was written by Ashley over at Money Talks. Her passion in life is to help you get control of your money. If you like this article head over to her site, or better yet, subscribe to her feed.

Getting organized can feel overwhelming but the time you spend organizing your finances will be returned ten fold. I know that stack of bills and drawer full of papers can seem intimidating, but if you dig in you will probably find it’s not as bad as it seems.

Set up a system to pay incoming bills

There needs to be some system for handling mail as it comes through the door. The circular file (the trash) is the perfect place for 90% of your mail. Most of what we get is trash and should be treated as such. Bills that need to be paid should have a special spot. Maybe it’s a hanging file holder on the wall. Maybe it’s a box on your desk. Maybe you just pay it right away. But if it gets laid on the kitchen table with all the fliers and notices then it will cause stress when it’s time to pay the bills.

One thing you should do when you file your unpaid bills is to throw away the envelope and inserts. Only keep the actual statement (or even just the coupon you need to mail back) and the return envelope. Extra papers will just clutter up your system. Again, trash needs to be treated as trash. If you don’t need it, it’s trash.

Set up a regular time to pay the bills you just carefully filed. Maybe you will pay them every pay day. Maybe you will sit down every Monday night and pay them. Or best of all, maybe you pay it right when it’s received. One and done is the best system, but I know life doesn’t always align itself with one and done. But imagine never having to worry about an unpaid bill. It’s a good goal to strive for when making your budget.

If you have a stack of bills that is stressing you out then that needs to be addressed. Sit down with the stack and make three piles; trash, current bills, and to-be-filed. Go through the stack one item at a time put everything into one of those stacks. Bills that aren’t current are trash. If you have a January bill and a February bill then January’s is trash. Put your current bills in your new “bill spot” for payment on your set date. File “to-be-filed” in the system you are about to create.

What about “in progress” stuff. You know, that bill that’s wrong and needs a call to the company. Or that flier from your kid’s school about the fund raiser next month. There will always be stuff that’s not really current, yet not really trash. If it’s just a reminder for something then put a note on the calendar and throw the flier away. If you need the paper work in order to follow up then put a reminder on the calendar and file the paper in an easy to reach spot. (You can even make a note on the calendar as to where the papers can be found.)

Set up a filing system for items that must be kept

Once you have all the papers together that need to be filed separate them into like kinds. Put all your tax stuff into one pile. All your medical stuff into another pile. All your insurance info into another pile, and so on. Hey guess what?! Right now, it’s sorted and you are officially organized. Now we just need to find a way to keep it neat and accessible. You can’t really have all these papers lying in stacks on your living room floor.

So you will want to choose a storage system that works with how much stuff you have . If you have a lot of papers to keep you can put them in a plastic tote. They have smaller ones just for paper that are easily stack-able. Or if it will fit into manila envelopes then that might be a cheaper and easier way to store your papers. If you really hate paper you can set up a system to scan it all into your computer and get rid of paper completely. But no matter what you choose make sure that you can easily add more to it as time goes on. In order to stay organized you are going to have to sort your mail daily.

What system do you use to keep your financial life organized?

24 thoughts on “Save Time and Money by Organizing Your Finances”

  1. Excellent tips Ashley! What I do is have a catch-all box. Some mail are easy to sort, they go in their respective folder, some I simply put them in a catch-all box and sort it out on the weekend.

    The downside is that if not attended promptly, this could overflow!

  2. I always make a point to pay the bills as they come in and then file them in the appropriate folder. This way I know everything is always taken care of and where to find the paperwork if I need it later.

  3. HA! The first thing I do is toss the outer envelopes and all the inserts. I don’t need the extra trash cluttering the house; it all gets recycled. There’s nice little plastic box with my bills that gets emptied each month. When the bill is paid, the payment is sent via money order – instant receipt, traceable payment and no surprise fees.

  4. I set up all my bills to be automatically paid by my credit card. Most of them I receive by email, but if I get a paper bill, I shred it after it’s paid. Then I just pay one balance on the credit card.

    The only bill I can’t do this for is my electric bill so I have to watch & remember that one — but remembering one is much easier than 6!

  5. Good Cents Savings

    Great tips, and I am a sucker for organizing! Cleaning out a closet is my idea of fun…yeah, I know, huge nerd! 🙂 One idea to add is to find a list of how long you need to keep each document so you’re not holding on to piles of paperwork needlessly.

    1. I hate organizing, so I have a real basic system: needed for taxes, needed for record of payment, and needed for starting a fire.

      My wife has a love that borders on obsessive for her labeler, so now, I just try to stay our of the way.

  6. Great tips. We don’t pay our bills immediately, because we like to both look at every bill that comes in the door. The key for me with other financial systems isn’t in setting it up….it’s in constantly weeding. I find that if I don’t look in a file at least once a quarter I tend to make another one just like it later….

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