Simple Steps to Organize Your Finances

stack of paperwork

A new year is upon us bringing with it the promise of a fresh start. People everywhere will be setting new goals and swearing off old vices. If some of your goals (or vices) are financial in nature, now is the time to get organized and put realistic plans in place for spending and saving. Whether your financial management habits need a total overhaul or just a few tweaks, here are some tips for getting started:


Getting rid of unnecessary clutter will help clear the way for a renewed focus on financial goals. Gather all of your paperwork in one place and begin sorting. You can shred ATM receipts every month, after you’ve compared them to your monthly bank statement. Bank statements, credit card receipts, utility bills and paycheck stubs should all be retained for one year (or three years if needed for tax purposes). Keep pay stubs at least until you can verify them against your W2 and social security statement at the end of the year. The IRS suggests retaining tax records for seven years but some tax experts recommend keeping your actual tax returns forever and just shredding or deleting paperwork associated with returns older than seven years. When it comes to your home, keep all documentation forever, especially records of paid mortgages.

Now that you know what you need to keep, you can create files – electronic or paper – which will be the first step in bringing some order to your financial life.

Update Your Budget

A budget is a no-brainer when it comes to finances and yet, there are so many excuses for not doing it! If you haven’t created one yet, don’t overthink it – just dig in! Start small with a simple budget worksheet as a guide to list income and expenses such as mortgage/rent, car payment, utility bills, cable bills, etc. If you’ve de-cluttered and set up files as suggested above, those documents are accessible and will provide the details needed to fill in the budget.

Take a hard look at expenses for any opportunities to save. Is there discretionary spending that can be cut back in favor of higher-priority goals? Ask your cable carrier about promotions that may reduce your rate. Consider how many times you went to the gym last year and decide if there’s a more cost effective way to meet your fitness goals. Contact a loan advisor for a review of your current mortgage and/or future plans for a home purchase.

Establish a System

Now that paperwork and budget are in order, create a system to keep it that way. Consistently paying bills on time is one of the best ways to maintain a healthy credit score. Designate a “bills to pay” in-box and sort through it weekly to ensure that bills are not misplaced or overlooked. You may need a separate file on your computer or in email for electronic bills. Commit to clearing both the paper and electronic inboxes weekly! Once paid, file each bill in its appropriate electronic or paper folder. As part of this weekly process, refer back to your budget to update paid expenses and keep track of what bills you are still expecting for the month.

Set Financial Goals

Now the fun part…a little bit of daydreaming! Think about what you want and what it will take to get there. Set specific goals that are realistic and measurable and create a prioritized time line. For example, you may want to pay down high interest credit card debt before you focus on saving for a dream vacation or buying a home. Not sure where to start? Try allocating your budget based on 50% needs, 30% wants and 20% savings/debt repayment and adjust from there.

Once your goals are established, write them down and celebrate each milestone along the way!

By Amy Malloy