4 Keys to Be Financially Organized

Just when you think you’ve got your finances under control…Companies merge, forms change, apps update, processes become obsolete. If you don’t keep current, you’ll find yourself a financial dinosaur.

It’s hard to stay on top of money management day to day, month to month, year to year. And nothing says disorganized better than that pile of financial paperwork overflowing your inbox, right?

Procrastinating is easier – until it costs you when you forget to transfer money, lose a bill or need to find that receipt. Get organized! If it’s time for a mini money makeover, make these four things a priority:

  1. Create your system – the simpler, the better. Use apps, software, reminder calendar, notebook, folders, files, shoeboxes, lockbox, whatever works for you. Be consistent, but adapt when you find something that works better or helps you be more efficient.
  2. Automate – everything you can. The less you have to remember or make time to execute, the better. (Good tasks to automate? Auto-backup your files, auto-pay recurring bills, auto-save deposits.)
  3. Update – when something changes. This is especially important when it comes to beneficiaries, legal docs like wills, account data, deadline dates. If you tend to let financial paperwork slide, organizing becomes too time consuming and something you don’t want to ever tackle.
    • Try to set aside regular time blocks to keep up on repetitive financial tasks – like filing, paying bills, reconciling bank accounts, checking monthly credit card statements.
    • If you have a major financial chore to do – like filing income taxes or college financial aid forms – break it into smaller, more manageable chunks.
    • You can also update how you handle tasks – like using online bill pay instead of writing and mailing checks, or deposit checks with a mobile banking app instead of visiting the bank.
  4. Tame the Clutter – Keep/file, delete or shred. Then, consider opting for electronic statements, receipts and signed documents when offered.

Clutter, Clutter Everywhere?

You might feel like pitching the invoices, receipts and statements piling up on the counter. Before the paper shredder goes to work, check this list on how long to keep financial records.

Keep these records for the calendar year:

  • Bank statements
  • Pay stubs (consider auto-pay direct to your bank account)
  • Social Security benefits statements
  • Investment/broker statements, including 401(k) plans

Keep these until you’ve reconciled your statement:

  • Bank deposit slips
  • Credit card receipts
  • Monthly bills and credit card statements
  • Keep statements and receipts you may need to prove tax deductions

Keep these records for 7 years:

  • Tax returns and supporting documents
  • Bank statements needed to prove a deduction on a tax return

Keep these forever:

  • Employer-defined benefit plan communications
  • IRA contributions
  • Brokerage statements (document gains/losses until sale)
  • Life insurance policies (most recent copy)
  • Loan documents (until paid and you have title)
  • Home improvement records/receipts (keep 7 years after you sell)
  • Savings bonds (you can convert paper bonds to electronic)
  • Safe deposit box inventory

Check Money Godmother posts for more tips to be financially organized in 2018.

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