How to Organize Your Personal Financial Records and Save Money

You can break up your organizing over several days if needed.

A deliberate spender often translates into a saver. Having an organizational system allows you to keep track of your finances. Scattered papers, mislabeled filing systems and unopened bills are ingredients for financial disaster. The basic principle for any financial organizational system is simplicity. The easier the system, the easier to maintain. Once your finances are in order and traceable, saving money follows naturally.

Things You'll Need

• File holders
• File box or cabinet
• Staples

Instructions

Organize the Mess

1. Locate all your financial documents and centralize their location. Break the task up over a period of several days if the amount of organizing is too daunting for one sitting.

2. Label file folders into categories. For example, "Loans" is a category. Keep the number of categories to a minimum but make enough categories you can retrieve records easily.

3. File all documents according to category in its file folder. If documents are loose but go together, staple them.

4. Throw away some documents. Discarding unnecessary paperwork will ease the clutter, keeping you organized for the long term. Tax records should be kept for a minimum of seven years, while loan documents should be kept for a year after loans are fully paid back. Bank statements and account information should be kept for at least a year, along with retirement and investment account paperwork.

5. Label a file folder for receipts. If needed, you can make two file folders, the additional one for tax-deductible receipts. This file folder is where you put all receipts after you spend money. This is a critical component in saving money as having a central place for tracking your spending occurs here.

Develop a System and Save

1. Create a place where you keep all your financial records and do your financial accounting.

2. Adopt the O-H-I-O method. This acronym stands for "Only Handle It Once." For example, when you get a bank statement out of the mail, open it and file it right away. Leaving it unopened on the kitchen counter runs the risk of it being covered up by other paperwork and forgotten.

3. Mark a calendar with important financial dates. Late fees for overdue payments add up quickly, along with bank overdraft fees. Mark your calendar with pay dates and due dates for all expenses. This calendar should reflect only financial information and not be combined with other events.

References

• Lifeorganizers.com; Organize Your Banking Papers; Peter Kenny
• Lifeorganizers.com; Organize Your Way to Wealth; Barbara Myers