6 Steps to Get Financially Organized

August 19, 2019

 

Whether you've been managing your money for decades or just graduated from high school, chances are you've made financial mistakes. These mistakes may include not setting aside 10-15% of your income towards retirement, failing to store money in savings account for emergencies, paying high interest on credit cards, or wasting money on overdraft fees.

 

According to a study by Northwestern Mutual, "More than one in five (22%) Americans have less than $5,000 saved for retirement, and 15% have no retirement savings at all." 

 

Below, you will discover six different ways to help financially organize your household towards better money management.

 

1. Organize eFiles

 

How many files are sitting on your desktop either not appropriately labeled or not organized in a file? It's a common bad habit we've developed to download a billing statement and save it somewhere we think we can quickly get later usually for convenience.

 

One benefit I have learned from the hobby of photography is the importance of organizing pictures and files.

 

Before doing this practice and making it a routine, I would randomly throw photos into a generic folder and not labeling any file appropriately.

 

After all, if the images are in one location, it should be easy to find. Right?

 

After quickly taking thousands of photos, I quickly learned to find these pictures are not easily accessible.

 

Learn from my mistake of not organizing correctly and become more effective in storing files by holding your data on your computer to a drive that is easily accessible and labeling it by the year of the bill or invoice.

 

Next, create several files in that folder and label it by month, for example, "February." This is where you can house each monthly bill. Fortunately, most statements can be downloaded in a pdf format. Having your bills in pdf format keeps it simple to open, print, and save for future use.

 

Third, in each monthly folder, create a fold for each company, you have a billing statement. For instance, if you pay utilities, create a folder for your electricity bill, water, and gas. Maybe you have a cell phone bill that requires a folder too.

 

Creating folders for the first time may seem to be tedious, but after creating the folders, it is usually a one time practice because the following month all you have to do is save the billing statement to its respective folder.

 

2. Create and Monitor a Financial Spreadsheet

 

The idea of creating a spreadsheet seems horrific to some. While some have no expertise or fluid knowledge in working with a spreadsheet, companies such as Google and Microsoft have made easy-to-use financial templates to track your household spending. All you have to do is download the template and plug in your financial information.

 

Utilizing spreadsheets is a terrific way to organize your finances because you can track your spending, monitor your savings and retirement, and compare historical billing to current monthly bills. It is this practice where I discovered one statement reflecting excess charges.

 

A utility bill increased unknown charges. While the amount wasn't significant, the numbers in my spreadsheet weren't consistent from prior months.

 

I called the utility company, and they acknowledged it was inputted as an error. Had I not called to dispute the charges, I highly doubt the company would have corrected the mistake and refunded the money back.

 

3. Autodraft Your Bills

 

Are you having trouble remembering when your bills are due or making payments on time? Take away the guesswork and eliminate the constant reminders from your phone or email alerts by auto-drafting your bills. Numerous companies have made the process very easy.

 

Check to see if your financial institution allows online bill payments. Most banks will enable you to set up a monthly bill payment service at no charge. This is an excellent practice due to having all bill payments in one location.

 

To learn about the pros and cons of automatic bill payments, check out this article by NerdWallet.

 

4. Avoid Mail Clutter

 

My household is guilty of throwing the mail on the desk only to see it pile up until the weekend. It is one task I fail at miserably but am trying to correct this habit.

 

By creating a file system or dividers where mail tends to accumulate, set it up, and label it accordingly. Set up one file or divider labeled for junk mail and another for billing statements.

 

This practice will save you time if you are rushing and pressed for time. By focusing more time and effort towards your billing statements instead of junk mail, you can alleviate wasted time and unnecessary distractions.

 

You can easily purchase mail dividers on Amazon or at your local Wal-Mart and Target stores.

 

5. Track Bills Due on Whiteboard or Calendar

 

With the hassle of keeping up with bills flooding your email, mailbox, or front porch, write down the due date of every statement you pay each month on a calendar or a whiteboard.

 

Writing down the due date for your bills instead of making a note in your phone calendar not only keeps your month-to-month task-organized but jotting down appointments and due dates help to trigger a mental reminder for your brain.

 

6. Download a Budget App

 

Are you looking for an app to help with your month-to-month budgeting? Since 2016, I've tried dozens of apps to help make the process easier that tracks my expenses and save me time, but have found only one app that truly delivers. This shouldn't surprise many, but the app is from the company Lampo Licensing, LLC, a Ramsey Solutions firm by none other than Dave Ramsey. The app is EveryDollar.

 

This app is the best budgeting app because you can access your data by mobile app or on the website and helps to enforce a Zero-Based Budget. There is a free version and a paid version. The free version is just as good, and the paid version connects to your bank account, saving you time.

 

The website has delivered helpful content in everyday money situations.

 

$pendee is another option. Ranked Winner of Mobile UX Awards in 2017, $pendee helps consumers control their expenses, accounts, and budgets in one place. It's earned 4.7 out of 5 stars on the App Store.

 

The app offers a basic Free service but has limited features. Starting at $1.99 if purchasing the monthly plan gives one access to unlimited accounts, import/export transactions, and much more. An annual subscription starts at $14.99 with a premium account at $22.99/year.

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