5 Steps to Organize Your Finances

June 09, 2013

Now that spring is officially coming to an end and you’ve cleaned your closets, organized your belongings, and gotten rid of all the junk, it’s time to spring clean your finances. With just a little research and hard work, you can reduce your money-related stress and, if you do it right, save significant money in the process. To get started clearing out your financial clutter, check out the following five tips:

1. Organize Your Financial Documents
First, get organized. Use whatever tools you’re most comfortable with to create a home filing system, whether they’re accordion folders or Excel spreadsheets. Create files for your monthly billing statements, credit card bills, investments, insurance documents, and taxes. Organize them by subject and then by date, with the most recent first. If you scan your documents or receive email statements, simply use the same system in digital format.

2. Analyze Your Monthly Bills
As you organize, take a closer look at each of your monthly billing statements. If you notice any strange fees, contact your provider and have them eliminated immediately. Since the recession, service providers have tried to pad their profits by sneaking hidden fees into their customers’ statements. Don’t fall victim to the tactic.

3. Look for Ways to Save
Take another look at what you currently pay for your cell phone, cable TV, and Internet service. Do some research and find out if the competition can offer you a better rate. Be sure to investigate bundling options as well, which almost always result in a lower bill.

Next, evaluate your smartphone usage. Chances are you’re paying for more minutes and data than you actually end up using. Find a plan that better suits your needs and pocket those savings.

4. Plan for Tax Deductions Throughout the Year
Create individual files for all the expenses you plan on deducting from your income taxes. Unreimbursed medical expenses, charitable contributions, and job search expenses can all add up to significant savings. When your deductions are organized, you can save yourself some serious hassle come next April. Just make sure you record the date and details on any work-related expenses you deduct.

5. Review Beneficiary Information
Review your insurance and investment documents to ensure that all beneficiary information is correct and up-to-date. Things change throughout the year, and in the event of any significant life changes like a birth, death, marriage, or divorce, you may want to alter where your assets and insurance payouts should go.

Final Thoughts
Either you run your finances or they run you, and the only way to get a solid grasp on them is to have a clear and organized picture down to every detail. The better this picture is, the more savings you can accumulate and the fewer headaches you’re going to have over the course of the year. So roll up your sleeves, get to work, and start cleaning today.