Spring is that time of year when many people feel the need to start organizing their finances more effectively. Yet, for many people, getting their financial information in order can sometimes leave them feeling overwhelmed and stressed. However, just letting your finances pile up can lead to many serious problems, including debts, and even health problems caused by anxiety.
So, if you have been neglecting your financial paperwork recently and want to get your finances back on track, then here are some simple and useful tips on how to get your financial information in order. Whether you want to reassess your in-goings and out-goings, or just want to make sure you pay your bills on time and leave your finances in a good order if the worst should ever happen to you, then there is no better time to sit down and get to work on organizing your finances.
Step 1: Purchase some storage
While it is all too easy just to hide bills away in the nearest drawer when they come through the letter box, when it comes to the day you decide to try and sort out your finances, pulling out a huge jumbled mess of bills which are in no particular order, can make managing your finances seem like a nightmare!
Thus, one of the easiest and most effective ways to get your financial information in order is to create an effective storage solution for all your paperwork, and start using it. A filing cabinet is the most effective storage solution for all your financial paper work, and will allow you to keep your finances organized neatly into set categories and dates.
If you only have a small amount of paperwork and have little storage room for a filing cabinet, then you could purchase an inexpensive expandable file to keep all your financial information organized. To ensure you always know where to find certain financial paperwork, colour coding the different sections, or arranging your finances into alphabetical order will also ensure you make the best use of your financial storage solution.
Step 2: Organize your financial paperwork effectively
The second thing you need to do is to start organizing your financial paperwork more effectively. This is essential, particularly if you want to make that mountain of paperwork you have been building up seem less intimidating.
So before you start working on your finances, just take a little time to organize your financial paperwork into some distinct ordered files. Separating your financial paperwork into categories such as; energy bills, food bills, television/cable subscriptions, rent/house maintenance, bank statements, housing insurance, car insurance, life insurance, taxes and luxuries, should help to keep your paperwork extremely manageable, and make it a lot easier for you to locate certain bills when you are comparing your in-going and out-going costs.
Also, as you work through your financial paperwork always try to keep your bills in a chronological order, so that the most recently dated bill remains at the top of the pile. This way if you do notice any inaccuracies relating to a particular period, you will have a clearer idea of where to find the corresponding paperwork so it can be rectified in a timely manner.
Step 3: Share the responsibility of finances
No-one likes the prospect of having to sort out their finances alone, especially when it feels as though you are trying to navigate your way over a financial mountain of paperwork! And let’s face it, if you don’t live alone, why should you be made to carry the responsibility of the finances alone? After all, these are not just your finances you are trying to organize, but the finances of everyone living within the household.
Thus starting to share the task of organizing the finances not only benefits yourself, by sharing out the burden and stresses associated with being responsible for the finances, but also makes other members in the household more aware of the current financial situation.
For many people, attempting to sort out their finances alone can be one of the biggest reasons why they feel so overwhelmed by the task, and just leave it for another day. So getting help from friends and family really can help you to get to grips with your finances and help you to keep on top of your finances. If you live alone and do not have any relatives or friends living close by to help you, then there are many independent financial advisors who you could contact for help when sorting out your finances.
Step 4: Keep a monthly log of your bills and budget
Another good tip for those wanting to manage their finances more effectively is to start keeping a small log book which contains details about the different bills you need to pay each month, the amount that will be due, and on what date that payment is due. Keeping abreast of all your outgoing bills can be very problematic, especially when you have to keep referring to different paper bills which can easily become lost. So ensuring you keep a log of all these outgoing costs within one book can be a useful technique to adopt.
A bill book does not necessarily have to be handwritten. You could create one using a spreadsheet document on your computer. Just ensure that you make a back up copy of your bill book in case you have any problems with your computer.
Alongside the details about your bills, you could also write down an overview of your overall monthly budget. This will ensure you know exactly how much money you need set aside for different purposes each month, and it should help you budget your money more effectively so that you do not become tempted to overspend on your day-to-day luxuries, and find yourself short of money when an important bill is due.
Step 5: Keep your financial information secure
Finally, whenever you are dealing with your financial information it is always important to remind yourself how sensitive this data can be, especially if it ends up in the wrong hands. Identity theft is now on the increase, and disposing of your financial information securely is becoming of paramount importance. Purchasing a cross shredder to dispose of your unnecessary or duplicate copies of financial information, is the best way to ensure the security of your financial information when it is no longer needed.
To keep financial information secure which is still needed, it is always a good idea to choose a storage solution that can be locked. Many filing cabinets can be purchased which come pre-installed with locks, so it is easy to keep your financial information secure.
To conclude, while getting your financial information into order can be difficult at first, once you have become accustomed to organizing your financial information more effectively, you will be surprised how quick and easy it can be to keep your financial information in order. Just remember to keep up the good work, and that mountain of financial paperwork will soon be a distant memory.