Organizing Your Financial Paperwork

August 25th, 2011 | by linda smit |

Keeping your finances organized may be easier than you think. Even if you hate organizing or are short on time, you can still stay on top of your paperwork by setting up a simple system. The best system reduces the amount of clutter coming in your front door and makes it easy to prioritize and deal with the remainder.

The first secret is to reduce the amount of time you spend on the same types of paperwork over and over again each month. For example, I can probably guess the majority of the things that are cluttering up your desk right now:

You can probably stop at least 50% of it from bombarding your mail box by having your bills and statements delivered and automatically handled digitally.

Many banks these days are offering free or cheap online bill pay, or you could go with a more comprehensive option like I use, Intuit’s Paytrust. Services like Paytrust allow you to manage all your bills in one place and set very specific rules and alerts for handling each bill.

Not only can you have many of your bank, brokerage, and insurance statements delivered to you electronically — doing so could actually save money. In an effort to cut costs and be more environmentally friendly, many companies are either providing incentives to go paperless or charging you a fee to continue receiving paper.

You’ll have to screen all the paperwork that can’t be digitized and automated that lands in your mailbox. You really only need one criteria for your initial screening — does it require immediate action?

If it’s something you can address later, you can add it to a “To File” folder, which we’ll talk about later on. The urgent paperwork can go into a “Due Tomorrow” file that lives close to the entrance of your home. Keeping it visible helps you remember to take care of the paperwork and keeps it from getting lost in a pile on your desk.

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Now that you’ve eliminated a chunk of paperwork and handled urgent documents, you still have to worry about the rest of it. I think this is where many people have a break down in their system and can end up keeping stacks of papers on their desks.

Two common reasons for not filing away these papers are that people are too busy and that they don’t know where to file things. If you can remove those two obstacles, you make it much more likely that you’ll organize your documents and declutter your desk.

I use a simple filing system called HomeFile that defines the categories for my paperwork and comes with dividers and a cheat sheet to remind me where things go. Over time you pretty much know where things get filed, but it’s a nice system for getting started — plus it can help when coming back to look for a specific document years down the road.

If your desk is already a pile of papers, then going through them can be daunting. Having a ready-made system like this can make it easier to get started tackling the mess.

The non-time sensitive paperwork in your To File folder can wait until you have some downtime to be filed. The time you choose will depend on your lifestyle and habits — just keep your eyes open for occasions when you’re sitting around home and can file a few papers.

If you’re not a big fan of organizing, or maybe just too busy, hopefully these tips have given you some ideas on how you can take control of your desk again.

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