• John J. Diak, CFP®

How to Organize Your Financial Life


Your finances are one of the most important aspects of your life. Having your financial house in order is what helps create stability or your family and your future. Organizing your financial information and financial documents ensures that you can locate exactly what you need whenever you need it to answer questions, make decisions, and put your mind at ease.

The truth is, there is a lot to keep track of and you have to make an effort to stay on top of it. From physical and digital files to account numbers and passwords, it’s your responsibility to keep it all easily accessible and in order.

Here’s how to organize your financial life:

Organizing Your Accounts

To get your financial life organized, the first critical step is to make a list of all of your financial accounts, including banking, debt, investments, and retirement accounts.

Once you have listed all of your accounts, the next step is to organize them in such a way that you are always able to access your balance and transactions at a moment’s notice. It’s best to enter all of your account information in a spreadsheet or online tool so you can see what you need at a glance, no matter where you are.

Be sure to look at all of your open accounts to determine if there are any that are inactive. You will want to avoid letting inactive accounts slip under the radar and keep an eye on them for suspicious activity. Check with your financial professional to determine if it makes sense to close unused accounts or keep them open.

After you’re clear on what accounts you have and you’ve organized the basic information, you’ll need to create a system for tracking your paperwork, including bills and other documents you receive in the mail.

Organizing Physical Documents and Paperwork

To effectively organize your financial papers, you will need to create a filing system that makes sense and that you will actually use. The system doesn’t have to be fancy or complex, it just has to be effective. The easier, the better.

A quick Google search will show you that there are tons of different systems and organizational ideas, so find one that works for you and stick with it.

Doing something as simple as dedicating one box to all incoming financial documents is all you need to get started.

The trick is to set a regular appointment with yourself to go through your mail and handle it in a timely fashion. Once a week, take action, pay the bills, log the information, or file the documents. Your goal should be to clear your inbox each week. Don’t let it pile up and become unmanageable. If you do, you might miss important due dates or alerts.

When you handle your financial papers, you will need a place to file unpaid bills and items that need your attention, according to the due dates. Then, make sure you have someplace to store papers when you are done with them because you might need to refer back to them in the future.

Over time, you can purge the documents you no longer need. Because most things can be found online now, there isn’t always a reason to hold onto the physical papers. Instead, sign up for online notifications or emails and get rid of all of the physical paperwork you don’t need.

But as a word of caution, you should never throw any of your financial papers away without shredding the documents first so you don’t fall victim to identity theft.

Organizing Your Numbers

Getting your financial life organized is about more than decluttering papers and putting systems in place. It’s your chance to get on top of your finances, gain a clear idea of what you have, ensure that you are making the best use of your resources, and come up with a plan to address financial concerns and challenges proactively.

To maximize your household budget, take a close look at your income versus your expenses on a regular basis. When you track your spending carefully, it may surprise you when you realize where your money is going. Have your paycheck direct deposited and set an automated savings payment. You won’t miss your savings payment if you never see the funds in your checking account.

Make a plan to periodically review all of your expenses, automatic memberships, and subscriptions. Don’t let that $9.99 autopay keep coming out of your account if you aren’t using the service.

Set up a financial meeting with yourself to review your financial picture at least quarterly, but ideally monthly. Create a budget and keep an eye on it to make sure you are not throwing away money unnecessarily. Your goal should be to not only track monthly expenses but also begin to prepare each year in advance for upcoming quarterly and yearly expenses, such as tax payments, memberships, auto, and home expenses.

Keep in mind that most unexpected expenses are actually costs that could have been anticipated with better organization and planning. Cars will need new tires and appliances will need to be replaced. Having that upcoming expense on a spreadsheet will give you time to prepare and handle it with ease.

Only by knowing what your numbers are can you consider steps to improve your finances.

Conclusion

When you are disorganized, you are far more likely to miss bill payments and due dates, leave yourself vulnerable to fraud, overspend, and make slower progress toward your financial goals. Organizing your personal finances can help to lessen anxiety about your finances and put your mind at ease.

John J. Diak, CFP® is the Principal & Client Wealth Manager at Oatley & Diak, LLC in Parker, Colorado. He assists clients through many difficult lifestyle changes such as business downturns, retirement planning, divorce, the death of a spouse, and family estate issues among others. Oatley & Diak, LLC is a family-run registered investment advisory (RIA) firm that provides clients with investment management and financial planning services in a hands-on, intimate environment. Learn more about them at oatleydiak.com.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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