Have you ever missed paying a bill because you lost the statement?
Is one of the challenges of tax time just trying to find your records?
Is one of the challenges that keeps you from budgeting the simple fact you aren’t real sure what your expenses are?
I believe one of the things that often keeps people from succeeding financially is not being very organized. A little bit of organization doesn’t have to require a lot of effort. It can really be quite simple. In fact, it is much better to keep it as simple as possible. If it is simple you will do it. If you try to make it too complex you will give up.
First have a place where you always put incoming bills. No exceptions. Doesn’t matter where this is. Maybe it’s a basket on your desk. Maybe it’s a particular drawer. Whatever works for you is fine, just be consistent. The key is if you keep them in one place you won’t forget bills or lose them.
Another way to make sure you don’t forget to pay bills is to sign up for an online bill pay service. I use one that is provided free from my credit union. Many banks offer bill pay services or there are third-party bill pay services. The benefit of these services is you can schedule when your payments are sent. Personally, I try to logon and schedule my payment as soon as the bill arrives. I schedule it to be delivered a few days before the bill is due, so I am sure that my payment will be processed on time. It takes me only a couple of minutes and I never have to worry about missing a payment.
Once the bill is paid you need to have a filing system. That sounds complicated doesn’t it? It doesn’t have to be. My personal filing system consists of a… Are you ready for this? An old shoebox. Once the bill is paid I just throw the statement in the shoebox. Rarely do I need to go back and check an old bill statement, but when I do all I have to do is look through the shoebox and find the statement I need. Very simple. I used to try to keep separate folders for each category of bills, but honestly there just wasn’t that much value to me in taking the time to do that.
The other benefit to doing this it makes things easy come tax time. All your receipts are there in one place. You don’t have to go on a searching expedition when it is time to do your taxes.
Lastly, there is a big benefit to using some kind of software to track your finances. I have used Quicken personally for many years. The real benefit of using software like this didn’t occur to me when I first started using Quicken. At the time I was just looking for a way to keep my check book balanced. What I discovered after doing it for a year or two was the real benefit was in the reports. When I enter each bill there is a category associated with it. The beauty is then if I want to know how much I spend per year on a particular category all I have to do is run the appropriate report and I have it.
Many people struggle when they first do their budget because they really have no idea how much they spend on things like groceries or eating out or gas for their vehicles, etc. If you use something like Quicken to track your expenses these questions become pretty easy.
There are many good options for tracking. As I mentioned I use Quicken. But there are many other choices. Mint.com, You Need A Budget, Mvelopes, FinanceWorks are just a few other good options.
Take the time
None of these ideas will take much time. I probably spend less than an hour a month on these activities. If you take the time to do it however I think you’ll find yourself much more organized. You won’t miss payments. And in the long run you’ll probably spend less time because you have a system. The real key is to be consistent with whatever you do. Pick a plan and follow it. You will save yourself a lot of headaches if you do.
If organization has been a problem for you, January is a great time to make some changes. It’s a new year, take the opportunity to make a change!