The New Year is the perfect time to reorganize your finances, especially with the upcoming tax season. Even if you’ve got a system, there are likely some improvements you can make. Here are my top tips for getting your finances organized for the new year.
I’ve found that the amount of financial paperwork I’ve received has decreased over the years, as many statements and invoices are now delivered electronically. But there’s still some paper that you’ll need to keep. I have a filing cabinet with folders to keep things organized. If you are setting up folders, here are some main categories you’ll want:
- Taxes (one per tax year)
- Mortgage (you may get bills online, but you should still have paperwork from when you closed)
- Credit cards (again, you may get statements online, but keep any important paperwork)
- Student loans (if applicable)
- Each vehicle (keep important maintenance documents as well as sales documents)
- Home (major repairs and purchases)
- Insurance (policies and claims)
- Each child (report cards, health records)
- Health care (for the adults)
- Important paperwork (wills, living wills, social security cards, birth certificates, marriage license)
Go through the paperwork annually and throw out anything you no longer need.
Update your budget
Review credit card and bank statements to see what you spent in the prior year, and make changes to your budget. See my flexible budgeting system for more details on how I budget.
Review your debt
Go through all of the your loans and determine what you’d like to pay down during the current year. Set a goal and review it quarterly.
Create a balance sheet
If you don’t already have a balance sheet, create one. And if you do have one, update it for the new year.
Develop a system
Schedule time each month to review your budget, update your balance sheet, and sort your paperwork. Follow my bill organization system so you don’t miss a payment.
Consistency and organization are most important. Schedule in time each month to review your finances and you should be in great shape for the upcoming year!