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How to Organize Your Finances Like a Responsible Adult

Written by , Posted in Money & Finances

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How to Organize Finances

Today’s post was written by fellow personal finance blogger, Anum Yoon. Enjoy!

Let’s face it: No one likes to deal with paperwork and clutter, especially the finance-related stuff. When you spend hours combing through sheets of easily torn, ink-smelling material, it can be mind-numbing. For the sake of being a responsible, tax-paying citizen, though, you have to do it.

Fortunately, you don’t have to do it the hard way. If you want to find the files you want, when you want them, within minutes, you need to organize your finances. For that, you can follow these tips for decluttering and organizing your finances.

Invest in a Filing Cabinet

In general, the bigger a filing cabinet is, the better. Even if you don’t have much paperwork at the moment, you can expect the pile to grow larger and larger over time. And I’m not saying you necessarily need to purchase those big metal file cabinets either. The one I use at home blends right in with the couch and works as a side table so it won’t be an eyesore.

Also, the more drawers a filing cabinet has, the better. This will make it easier to separate your files into specific categories. For example, you can designate one drawer for “credit cards,” another for “auto,” still another for “insurance,” and so on and so forth. Within the drawers, you can separate files according to folders (e.g. “annuals,” “quarterlies” and “monthlies”).

There’s no one-size-fits-all rule to using a filing cabinet. As long as the organization makes sense for you, and as long as it cuts down your search time significantly, any rule goes.

Make Electronic Copies of Your Files

But what if a filing cabinet isn’t a practical option? What if there isn’t enough room in your place for one? What if, despite of your filing cabinet, it’s still a hassle to search for files? That’s where the electronic option comes in.

The nice thing about electronic files is they’re much, much easier to find when you need them. All you have to do is type the file name in the “Search” bar on your computer, and presto! The document you want shows up in no time. Also, you can easily drag-and-drop digital files between folders when the situation calls for it.

If you can easily access a document online, e.g. bank statements and tax returns; you don’t need a hard copy of it. You can just download those digital copies, save them on a malware-free hard drive, and shred the physical copies sent to you on a regular basis.

If, however, you need the physical, original copy of a document for any reason, e.g. birth certificate or marriage certificate, you can scan the document, file the original one in a folder, and keep that folder in a secure, damage-proof place.

Use Apps to Track and Organize Your Finances

At some point, you’re going to need extra space/backup for your electronic files. For that, use Dropbox, Google Drive and other cloud storage services. These will allow you to access documents no matter where you go or what device you use.

In case you need help organizing the files per se, there are apps for that, too. If you’re comfortable with Microsoft Excel, you can link your finance-related worksheet to supporting documents. Otherwise, download the best tracking apps for your iPhone or Android device.

Schedule Time for Getting Organized

You don’t have to clean up your paperwork every day. It’s fine to do it once a week, once every two weeks or once a month, whichever is most convenient for you. The important thing is to make a habit of it. Habits take time to develop, though, so you’ll want to block off “Paperwork Clean-Up” day on your calendar, until it becomes second nature for you to declutter and organize your paperwork regularly.

And while you’re at it, don’t forget to reward yourself for a job well done. That way, you’ll learn to associate “organizing finances” with “a cup of fresh, steaming Starbucks coffee” instead of “soul-sucking drudgery.” By spending time now to save time in the future, you’ve definitely earned that reward.

How do you organize your finances?

Anum Yoon is a personal finance blogger who loves sharing her hard-earned insights about money management. She leads a green and eco-friendly lifestyle in an effort to contribute to the sustainability movement, as well as to reduce her budget. You can read her updates on her blog, Current on Currency.

*Part of Financially Savvy Saturdays on brokeGIRLrich, Disease Called Debt*

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Kayla

Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore or follow her on Twitter.

10 Comments

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