Several weeks ago we started a series “Ten Smart Money Management Steps” and step number one was getting organized. It just stands to reason if you have a big messy pile of unopened bills and statements then you probably don’t know where your money is really going or in many cases how much you even have. Use a filing system to get organized.
Your filing system can be as simplistic or sophisticated as you desire. Anything from a plain brown accordion folder to single manila folders kept in a kitchen drawer will suffice just as long as you set up a filing system that is convenient and easy to understand.
Next, dedicate an afternoon and gather all your financial documents together including insurance papers, auto loan documents, monthly bills and bank statements. Start a file for each separate category and start filing in a manner that makes sense to you. Also, if remembering due dates is a problem, hang a wall calendar in a prominent location and mark the payment date a week in advance. That way you can insure everything is paid on time with no late fees.
Now that your filing system is in place set aside a specific day and time to go through your weekly mail. Open the mail so you can file and organize all documents. It’s not necessary to keep everything; one good rule of thumb is anything that is related to your home, car or yearly taxes needs to be kept indefinitely; while monthly bills like water, gas and credit card statements can be replaced when the next/newest bill is sent.
You’ve taken the time to set up your system; now don’t fall back into bad habits! By keeping track of your financial life you can easily take advantage of things like reduced auto loan rates, have insurance papers on hand if an emergency arises and just have the peace of mind knowing you have a very important part of your life under control!