Five Ways to Organize Your Finances
Now that holiday spending is coming, it is a great time to take a look at your finances. Roll up your sleeves, dig deep, and check all those nooks and crannies in your personal economy. After you get everything organized, you can start to look for some creative ways to save. Before you start shopping and holiday expenses start to roll in, it’s time to get your house in order. Here are a few ways to get you started:
1. Put a Filing System in Place
Create a home filing system for your monthly bills and account statements. File everything first by category – credit cards, utilities, real estate – and then by date, with the most recent first. If you have a scanner at home, consider digitizing all your records and backing them up in the cloud – they’re better protected and take up less space that way. When tax time rolls around, you can look forward to a lot less effort getting everything in to Uncle Sam.
2. Look for Hidden Fees
Ever since the recession hit, banks and other financial institutions have been trying – and succeeding – to pad their income by sneaking unwarranted fees into the monthly statements of their customers. Examine all your statements thoroughly for anything out of the ordinary. If you spot something suspect, call customer service immediately.
3. Consider the Competition
Service-based businesses like cell phones, cable TV, and Internet providers are facing steep competition from one another for your dollars. Take advantage of that. Do a simple Internet search and chances are you can find a better deal out there. Also, look into bundling your services – if you can get all three from the same provider, you could end up with a good discount. Just be wary of tough contracts with annual commitments and early termination fees. You never want to be locked in to anything, especially in a buyer’s economy.
4. Review Retirement and Insurance Documents
The next thing you want to do is review your retirement account statements and life insurance policies. Examine them thoroughly, and speak to a financial adviser if you have any questions or concerns. If your investment portfolios need any adjusting, now is the time to do it. Also, make sure the beneficiaries on all your insurance documents and wills are up-to-date and accurate. Often a major life event like a birth, divorce, or death can cause a shift in your thinking.
5. Create a Personal Budget
Once your finances are officially clean, it’s time to establish a personal budget. Having trouble deciding if you have too much debt? Use an online debt calculator or budgeting service if you’re computer savvy. You can even create a simple Excel spreadsheet if you prefer.
Log all your income and expenses – and if you’ve recently reduced your bills by eliminating fees or switching providers, make sure to record the new figures. If you’re spending more than you make each month, it’s time to get out the scalpel. Once you achieve a surplus, you can apply it to reducing your credit card debt or to achieving any other long-term financial goals you may have.
Either you run your finances or they run you. The first step in getting control of your personal economy is to have a clear, organized picture of it. Be frugal, do your research, and resist impulse buys and you should be able to get things easily under control. It may take some time, but anything that’s worth doing often does – and most importantly, no one is going to do it for you.
What other ways can you think of to organize your finances?
About the Author
David Bakke, writes about tips and strategies for smart shopping and frugal money management, all while working to help prevent identity theft and other security issues.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc. © 2013 ConsumerInfo.com, Inc. All rights reserved.