Manage Your Finances by Organizing

It's always a good time to learn how to better manage your finances. Just like you handle other aspects of your life, it's important that you restrict spending to some extent.

Before you can expect to make real and lasting progress on your financial goals, you need to prioritize your financial life. After all, it’s your hard-earned money! To better control what’s going on with you monies, you need to know how to organize what you spend!



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How do you know if you need to organize your finances? Here are a few questions to ask yourself:

  • Have you recently made a late payment because you misplaced or lost a bill?
  • Do you have an updated copy of your credit report?
  • Do you know your credit score?
  • Do you have a list of all your accounts, numbers, online ID’s, and passwords?
  • Do you have a copy and list of your IRA and life insurance policies, including beneficiaries?
  • Do you have a copy of your will, living will, and power of attorney?
  • Do you have specific financial plans for paying down your debt and building your savings, with specific goals, dollar amounts, and dates?



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    If you answered 'no' to more than three of these questions, you would benefit from a plan to manage your finances. To earn good credit for example, you must pay your bills on time or alert the company when you make a late payment. Late fees hurt you financially, so staying on top of your bills is essential. Paying late also hurts your credit score if they’re delinquent time and time again.

    The exception of course, is when a catastrophe or disaster happens. However, you still are obligated to pick up the phone and call the company of the event and let them know you are working on getting your payment sent in as soon as possible.

    The first step to get control of your finances, is to organize your bills. You can’t manage your finances if bills are disorganized, misplaced, or scattered about. Plus, without some organization, your really won’t know where you stand financially.

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    How to Manage Your Finances by Organizing



  • Those piles of papers, bills and statements cluttering the kitchen counter only create a mess and will NOT help you manage your finances. When you get your bills in the mail, place them in separate folders (or stacks) for each category; bills, tax documents, bank statements, and personal mail. To better organize bills, stack them up according to due dates. Write the due dates on the outside of the envelopes so you know which bills must be paid first.

    If you have your bills debited automatically, be sure to write the dates down on your calendar and then be sure to write them into your check register. When you don’t record payments or debits, you can send your bank account into overdraft, and it will be charged banking fees for each bounced check!

  • Make a list of all credit cards you have, including account numbers. Doing this helps protect your finances! For each credit card, include the toll free phone number found on the back of each card.

    Having this information stored in a safe place will help you in case anyone ever gets your credit card information or you lose your card. As soon as something happens, you need to close the account! Stolen credit cards and fraud happen easily. Know what you've got and how to get in touch with creditors!

  • Close out your checkbook register at the end of the year and start a new one. File the register from last year with tax statements you will need for your tax return. You can buy a multi-file box for your tax returns and related statements that help you get organized throughout the year.

  • Keep all your insurance policies, wills/trusts, birth/marriage certificates, passports and other important documents and papers in a fireproof safe box. Make a copy of all financial records you may have on your computer. Fireproof boxes can be a real lifesaver and can be purchased from any local superstore. These should be kept in a safe place in your home.

  • Use a safety deposit box at your bank to store valuable and irreplaceable documents and items, like health insurance plans and jewelry. Many bank accounts come with a free safety deposit box, so check and see if you already have one available to you.

    Your Will should not be stored in your safety deposit box though, because upon your death, the bank will freeze access for other family members/trustee's. To have access to your lock box, all approved persons must have a signature on file before your death. If you’re not approved to go into the lock box, you’ll have to wait until the court approves it or appoints a representative to oversee opening it.

  • If you have multiple accounts with the same title, not only can it be terribly confusing, it is much harder to track your investment performance. You may for example, have several retirement accounts, such as IRAs or 401(k)s under a prior employer's plan. If so, consider rolling over and consolidating these accounts into one IRA. One account is much easier to monitor and can help you manage your finances. It’s also much easier to keep your beneficiary designations updated.

  • Do you have too many credit card accounts? Although there may have been a reason for having each account in the past, if that reason is no longer valid, then close them. Too many accounts that go unmonitored are prime targets for identity theft. These unmonitored accounts can be easily stolen by predators and used to perpetrate fraud using your information. Its also a good idea to get an updated copy of your credit report that lists all of your accounts to manage your finances. Credit reports from all three credit bureaus can be accessed for free at http://www.annualcreditreport.com. Contact the credit card companies with the accounts you want to close. Ask them to note 'Closed per account holder's request' on your credit report.

    There is a downside for closing some accounts though. Closing credit accounts where there is a long history of on-time payments and a large amount of available credit, may have a negative effect on your credit score. However, closing smaller department store cards, with lower limits, should have little or no effect.

  • Most people don't even have basic estate planning documents, which include a will, living will, and durable power of attorney. These documents state what happens to your assets, who will be the guardians of minor children, and who will make health decisions to manage your finances if you are ever unable to do so.

  • Just as you use programs to file your taxes, you can buy software programs like Quicken Willmaker or Money Map Financial Software that help you with legal matters. Create legal wills using the software. These programs help point out the issues you need to consider in drawing up a will and help you decide options you have. They walk you through making a will and provisions you need to consider for your situation. They can be a real blessing when you want to manage your finances.

    Once you've finished, seek the advice of an attorney who can help you complete the process. How much you'll pay will depend on how simple or complicated your estate is. A simple will and related documents may cost as little as $250 to $500. However, you can easily spend $1,000, or more when trust provisions are included.

  • Manage your finances better by considering 'what if'. What if something were to happen to you? Would your family know exactly what financial accounts and documents you have, where they are located, and how to access them? They also need to know all account passwords you use.

    Put together a personal document that lists the information on your investments and retirement accounts. Also include information on all legal documents which includes your property (deed to home, title to cars, boats, etc.), insurance policies, legal agreements, and all usernames and passwords. If you have a hard time getting things together, use programs like Anytime Organizer, which can organize everything. Personal document lists should include the names and phone numbers of guardians, executors, trustees, lawyers, accountants, investment advisors, and the location and contents of any safe deposit boxes, including where you have stored the key and the number of the box.

    Plan to Manage Your Finances

    Many people set financial goals but don’t follow through with them. Perhaps life gets too complicated or time is a factor. It’s easy to get discouraged when weeks and months go by without making progress. You may also get discouraged when you don't see immediate results. Whatever your financial goals, if you want to be successful in reaching them, then you must plan to manage your finances!

    There is a saying; 'plan your work and work your plan'. It applies to your finances and how you manage them. Any goal that's not written down is more likely to fail! The best way to reach your goals is to keep them realistic and write down specific plans of action. For each goal, write a summary of what you want to do, why you want to do it, and when and how you will 'get er done'.

  • When you write out a plan, think about the most effective way to accomplish your goal. For example, the key to paying off your debts in the shortest time is to know which debts cost the most. Make a list of your debts arranged by interest rate, from high to low. The debt with the highest interest rate should be paid off first. If you have any savings, use it to pay it off or down. In most most cases, your savings is earning less interest than the debt you owe. After the debt is paid off, use the money that was paid toward the debt payments to pay off other debts or build up your savings again.

  • Create a plan that allows several different ways to accomplish your goals. For example, the money to pay off debt can come from increasing your income, reducing expenses, selling unwanted items, or all three.

  • Finally, the key to a good plan is to 'keep it short & specific'. This is called the KISS principle and is easy to implement.

    1) Goal: Pay down $5,000 of credit card debt this year.

    2) Why? Getting rid of the monthly payments will enable you to increase cash flow and build savings.

    Steps to Manage Your Finances

  • Stop using credit cards.
  • Use some cash in savings to pay towards debt.
  • Use tax refunds to pay off debt.
  • Pay additional set amounts each month to pay towards your debt.

    With written goals and better organization, you will be much better able to manage your finances. The amount of paper work that has to be tracked and accounted for each year, keeps growing. Now is a great time to take the time to file down the amount of paperwork you need to account for each year. The less paperwork you have to worry about, the better able you will be to pay off debts and take control of your financial life again.






    Related Pages on This Site

    How to Save Your Money During Hard Times

    Manage Your Finances to Save Money

    Using Debit Cards – The Advantages and Disadvantages

    Increasing Income to Save Money in the New Year

    Seeking Work in Tough Economic Times

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