Thursday, February 23, 2012

Organize Your Financial Self, Today!


Today was an errand filled day.  J and I organized some more of my stuff at the apartment.  I can't wait to finally get everything totally cleaned and organized!  We have most of our furniture in order, but we have big plans for one part of the room!  I'm going to set up my art corner on one side so that I can work on drawing my illustrations and editing my photographs, on designing for my line of tote bags and for writing blog posts!  :P  The other corner is going to be the music corner where J is going to set up his keyboard, guitars, and recording equipment.  I'll feel relieved when it all comes together.  :)  I'll also post pics when it's all done!

It really was the perfect day to run errands and visit some family.  The weather was so warm that I went out with a light jacket!  It felt like springtime!!!  One day this week is going to be even warmer, in the mid sixties!  Can you believe it?!  When the weather starts to get warmer like this I start thinking about cleaning.  I go through this spring cleaning phase where I have this urge to completely re-organize my closet, the kitchen, under the bathroom sink, everything.  The scariest thing to organize however, is financial paperwork.  Never fear!  With tax season upon us, I'm going to help you out, my friend.

Read on for five easy steps to get your financial self in order this month!




There are five simple steps that I've learned from an article written by Diane Harris.  To briefly summarize, here are the five steps to getting your financial self organized:

  1. Toss whatever papers you can.  There are really only three major categories that you need to divide your papers into.  These are: records that you need to hang onto for at least one calendar year (such as monthly bank and credit card statements), papers that you need to save for seven years (which is the typical window in which you could be audited... fun), and the ones that you should hang onto for forever.  When it is the appropriate time to throw out papers, DO IT!  Some things you can even toss after one month!  Yay!  Papers like ATM and bank deposit slips, and credit card receipts can get tossed after you have reconciled them with your monthly statements.
  2. Hang on to what you must.  You should hold on to final credit card statements, W-2s, and 1099s for at least three to seven years.  As for things to hold on to indefinitely, hold onto tax returns and year end summaries.  You should hold onto receipts for major purchases and home improvements.  
  3. Give your papers a home.  Designate a spot in your home to deal with the paperwork so that nothing gets lost!  This is key!  A drawer, a cabinet, a closet, anything!  Anywhere where you can store bills and current records.  Make sure it's near a table or desk where you can write checks (Unless you pay bills online!)  Let's see, as for supplies you may find it helpful to have some manilla envelopes for filing papers, and a file cabinet or some sort of box to store your records and papers.  If you like, you should also keep important documents near your other financial papers so that they are safe, but you still have easy access to them.  Important documents such as your birth certificate, marriage certificate, insurance policies, property deeds, and other permanent records.
  4. Be systematic.  Have a plan for processing everything and do it routinely so that it doesn't pile up on you.  Designate a spot for bills and be sure to place them there when you get them in the mail!  Once you have paid a bill or checked a statement, file it!  Don't be lazy!  When you file you may want to use labeled folders to make your life easier in the end.
  5. Tackle the backlog.  Once you have your system in place, attack a chunk at a time.  Don't overwhelm yourself or you won't want to do it.  Turn on some music and get to it!  It will seem a lot less daunting that way.  Once you get your papers organized you'll be amazed at how light you'll feel, how less stressed you'll feel.  
Good luck!  Let me know how it goes for you!  :)


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