Do you feel overwhelmed with the number of financial records you have to sort through? One of everyone’s least favorite parts about adulthood is managing finances. Aside from paying rent and utility bills, you also split your money efficiently.
Unorganized financial papers won’t only cause a mess at home, but also cause penalties! Did you know that filing your tax records late will incur a 0.5% increase in your balance due each month? With most bills having strict payment dates, you can’t risk having disorganized records.
Are you looking for a few tips and tricks on keeping your financial records organized? If you need advice on organizing finances, you are in luck. Read on to discover more!
Write Down All Account Information You Have
The first step in organizing our financial records is writing down all accounts you have. These financial accounts can be bank, insurance, and investment applications log-in details. You should also include other pertinent information such as beneficiaries, balances, and payments.
You can do this step on pen and paper, but you may also do it on applications such as an excel sheet or a word document. When keeping digital copies with log-in information, make sure to use password protection. It is important to protect any files that can compromise any financial account you have.
Some examples of accounts to take note of are checking and savings accounts, credit cards and 401(k)s, and IRAS. Add all financial records that apply to you such as student and car loan accounts. If you are paying medical debt, mortgage, and insurance then you should include those too.
If you have any loan or debt accounts, also take note of the monthly payments and interest rates. It is important to write the total balance remaining, loan term, and any relevant details. You can also add other details such as your personal payment goals.
Check Your Credit Report
One of the hardest financial records to be on top of is your credit report. You should check your credit report every four months. This is important to see if there are any missing payments, mistakes, or red flags.
Gather Your Financial Documents
After you’ve organized your online personal finances, it’s time for financial papers. If you have a huge stack of financial papers, it is now time to tackle it. When organizing this stack, ask yourself if you need a physical copy of it.
For instance, you might get mailed your cable, internet, and phone bill monthly. Ask yourself if you actually need a physical copy of a 3-month-old cable bill. If not, then consider creating a digital copy of it.
Only keep the most recent record of financial papers like bills. If the bill is over a year or months old and you can get another copy upon request, it is time to shred it. The only exception to this rule is your tax returns.
Consider Keeping Digital Files
Keeping a digital copy of a financial record is straightforward. All you need to do is take a picture of your financial paper. Ensure that the text is legible and that no part is blurry, covered, cropped, or cut off. For best results, you can scan your financial papers.
As mentioned, the only exception to shredding old financial records is tax returns. It is crucial to back-up tour taxes. You should save your physical copy of your tax returns for at least three to seven years.
Create a Filing System
A filing system doesn’t have to be complex in order for it to be efficient. After all, being an organized person is a habit and not a one-time thing. A simpler filing system will be easier to do and follow when keeping financial records.
There are many filing systems you can follow. A simple method is a cube organizer in which you can store folders and binders in. Once you have a place to store your financial records, create a financial filing system.
Your financial filing system can be any organized system that suits you. You can categorize financial records based on type or priority level.
A simple labeling system can include bills, to-do’s, and paper that needs filing. Each category can also have a subcategory.
For instance, your bills folder can have subcategories. This includes utility bills and subscription bills. This binder or folder for bills can be further organized with the help of tab dividers.
Invest in Tab Dividers
Whether you own a financial logbook or dividing folders, tab dividers are essential. One binder that keeps information like your 2020 spending can get disorganized fast. Having tab dividers that state what month of 2020 it is, or what kind of spending it is will help you stay organized.
Are you looking for tab dividers to help organize your financial records? Look no further than Tab Shop! Click here to find a wide variety of tab dividers that you can customize.
If you have many different categories, organizing them can be overwhelming. That is why you should consider investing in custom binder tabs. Custom binder tabs have different colors, paper options, and text.
Color coding is a great way to organize your financial records, as it is more visible. Color coding also helps you learn and remember information faster. Organizing your financial records through color-coding makes them easier to find.
If you are keeping your filing system at home, consider investing in a filing cabinet with keys or a lock. Keeping financial information can be dangerous and might expose you to theft if not secured. If you can, make sure to fire-proof and waterproof your storage system.
Organize Your Financial Records Today
Now that you know how to keep your financial records organized, you are sure to be on top of anything financial. Managing your finances isn’t always fun, but it doesn’t have to be hard. Use this guide to get your records in order.
Looking for more tips to help you navigate your way to financial security? Check out our other blog posts for more great guides.
