How do you get your personal finances in order, when you don´t even know where last month´s bills are?
A major cause of excessive spending, inability to save and failure to reach goals is simple disorganization. At the end of the day, disorganization may be the reason you are not where you ought to be financially.
Tangible consequences of disorganization include interest rate increases, overdraft and late fees. All of these can add up to hundreds of dollars, which could well be used in more pleasant ways.
Financial disarrays could take a toll on your credit rating, assets and even more valuable: your time and peace of mind.
So, how to turn chaos into order? Follow these simple steps:
– Set up a workstation: By leaving bills strewn around the house, writing checks while preparing breakfast and trusting payment dates to memory, you are setting yourself up for disaster. Organizing your bill paying activities is the first step towards a healthier financial attitude. Establish an area with easy access to a calculator, a calendar and filing
system. Set up a fixed time and day each week to sit there and work.
– Schedule bill payment: Use the system that works best for you as a reminder of payment dates, including those of pawn loans, credit cards, car leases, rent or mortgage.
Use your preferred tool: a paper planner, wall calendar, computer or phone alarm. Don’t rely on third parties to remind you of your obligations.
– Establish a file system: Set up a two tier paper tray or a binder with dividers on a spot near your workstation. Place all pending bills on one section. Once they have been paid, move them to the other section. By the end of the month, move all papers to an “historical archive”. Keeping this archive well organized is important, since you may have to visit it if you ever want to dispute a bill.
– Use online banking services: Online banking is a life-changer. Granted, some websites are easier to use than others, and there is a learning curve to go through. But once you get a hang of it, you´ll appreciate its advantages:
– Better financial control
– The ability to monitor transactions on a daily basis
– Less clutter: substitute the above mentioned file system with an electronic one
– Eco-friendly: no need for paper bills or checks
– No missed payments: take advantage of automated payment options
– Save time, stamps, and gas: no lines, no transportation costs, no stress
Other organizational tips:
If you use your computer to make payments, take a screenshot of the confirmation screen, and move it to an electronic file. Don´t trust the debtor to send you a confirmation email, which could get lost on your spam folder.
– Review your statements every month. Billing mistakes are more common than you think.
– Purge your purse and wallet of bank receipts and retailer tickets. Move them to your files at home.
– Check on your checking account balance frequently. This is how you prevent bounced checks, overdraft and late fees.
Blog Author: Sharon R