Organizing Your Finances

January is the perfect month to organize your financial paperwork, as January is typically when year-end statements, as well as tax paperwork, starts filing in.  I would recommend that your system includes a filing cabinet (or something that serves the same purpose),  a bill book, and some sort of mail sorting system.

I’ll start at the beginning, when mail enters the house.  In my household, the mail is a big area of potential mess, as we get a lot of it.  I have a few bins in our front living room, under our living room table so they look decorative, which serve as “mail holding bins”.  One is for coupons and special offers, one is for magazines, and one is for kid stuff, like Tessy & Tab Magazine.  Anything else goes in our “filing” bin.

The “filing” bin is sorted about once a week, and those items either go into our filing cabinet, or our bill book.  I’d highly recommend getting a bill book — you can pick one up at Staples.  I put the bills in the folder of the month they are due, and go through the book weekly to pay bills.

Now, on to the filing cabinet.  Earlier last year, I spent a few hours organizing my home office to label all folders, reorganize, and throw out anything unneccessary.  It was definitely time well spent.  At a high-level, make folders for each tax year, mortgage, credit cards, student loans, each vehicle, home, insurance, each child, health care, and any other major expense.  We also have a folder with wills and living wills.  Any receipt of any significance, as well as important paperwork, gets filed into one of these folders.  Annually, go through the folder and throw out anything old.

Any other tips for organizing your finances?  Post here!