How to Get Your Personal Finances Organized

How to Get Your Personal Finances Organized.

There are many ways in which you can establish financial health in your personal life. These ways have one common ingredient: self-discipline. No method will work if you are not consistent in forming and maintaining good earning and spending habits. If you are serious about getting your personal finances in order, consider the following steps.

Steps.

1. Create an organized filing system. Divide your financial life into various categories: bills, pay stubs, and receipts, for example. Keep everything in chronological order so it can be accessed easily.

2. Clean up your bank and credit accounts. Don't let inactive accounts remain open. They just clutter your financial portfolio and could harm your credit.

3. Limit your bank accounts. Keep only those you need and actively use. Some people may need just one account. Others may prefer to break their finances into savings, checking, and emergency funds.

4. Limit the number of credit cards you hold. Maintaining several cards can tempt you to spend more than you would otherwise. Whatever cards you use should never carry a balance from one month to the next. Pay them off every month, or at the very least pay the required minimum amount each month.

5. Take control of your spending by establishing a budget. Make a list for grocery shopping, and stick to it. Keep all your receipts, and take note of each expenditure. Don't be one of those people who say, "I don't know where the money's gone!"

6. Put most of your purchases on credit cards. If you are comfortable carrying cards, and you are disciplined about paying them off every month, put your purchases on cards. There are two reasons for this:

The monthly statements will show you exactly what you've spent

Most cards offer monthly rewards in the form of discounts, cash back, or gifts. If you can find a card that gives you an instant discount every month, that's probably the most practical reward available (probably not the most "fun.") Just make sure that you don't purchase beyond your budget. Let that budget, not your credit limit, determine how much you spend.

7. Organize a location for filing unpaid bills, and establish a bill-paying day every week or two. Note when a payment is due, and mark that in a daily planner specifically for bill paying.

8. Allow technology to assist you in organizing your finances. Set up automated payments for your regularly scheduled bills, so you are never late paying them. With automated payments, you will most likely receive e-mail reminders. Document these dates in your planner, and verify that you have enough funds in the appropriate account. Make a note of each payment, and file it in the proper folder.

9. Make a list of all your usernames and passwords. Keep it in a safe place. You'll want to be able to access this information on bill-paying day, so keep it readily available.

10. Invest in a shredder. Destroy unwanted financial documents containing confidential information. Shred credit card offers, too.

Question : How long should we keep old checks and financial papers?
Answer : In practice, no one really needs to keep those things. In theory, you should check the rules imposed by your government. If they can audit you up to seven years back, then you must keep the receipts that long. If you like to be complete, you can keep them indefinitely. But then please do organize them by year and type, if only to help out the people who have to go through them after you die. There are companies that can digitize them for you so that you can save them on a flash drive instead of in a huge paper archive.