Julie Bestry
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What is a good "system"
for handling bills as they come into the house with all the other mail?
After our brief break, I'm back to answering questions about personal
organizing to help you achieve balance and mastery in your home and
professional life.
The question I was asked was a good one. It recognizes that
good money management doesn't just happen, any more than exercise,
diet, continuing education, marketing or anything else in our lives.
We have to be present (i.e., focused), develop rituals that
keep us on-task, and commit to doing the necessary work.
It's easy to get overwhelmed by financial paperwork. However,
disorganized finances can cost you more than the $39 average late fee
charged by credit card companies. Your payment history accounts for up
35% of your credit score, so disorganized finances can end
up costing you thousands of dollars in higher mortgages, car loans and
credit card interest rates.
Financial clutter also means missed tax deductions, lost personal
financial opportunities and failure to detect identity theft.
Also, in terms of business, banks and venture capitalists are
going to be very wary of lending money to solo-preneurs who have
illustrated a lack of personal financial management. After
all, if you can't handle your own money or manage to pay your cable
bill on time, how can they trust you to be responsible with the money
lent to you to start and grow a business?
Finally, a 2004 study from New York University found that people who have control over
their finances are, on average, 39% wealthier than their
less organized peers. These tips on organizing your finances
can help you get control and feel like a lottery winner!
1)
SHOW UP FOR MAIL CALL—Open the mail every day!
It sounds simple, but the rules that govern the rest of life govern
your finances, too. Woody Allen is famously quoted as saying
"90% of life is just showing up." Well, a large percentage of
handling your finances starts with knowing what's actually going on,
which means opening your mail!
If you're overwhelmed, create
a ritual where you open the mail every day at the same time,
perhaps just after lunch or just prior to dinner.
Empty today's receipts out of your wallet and record them in your
register, too. A few small bites are easier to handle than an
enormous meal.
Some people are so anxious about debt that they put off opening their
bills until it's too late to pay them on time. But financial health is just
like physical health-- you're better off going to the
doctor and getting a diagnosis, even a scary one, so you can start
treatment. Once you know how much you owe and at what
interest rates, you can start getting healthier financially.
2)
BUILD HOMES FOR YOUR MONEY
If you've read even a few of my Business Consortium posts here on Ryze,
you know that the Golden Rule of Organizing is:
Don't put things down.
Put them away!
And "away" merely means creating homes
where your possessions belong. Creating homes for your money
is simple:
Keep Your Cash
In One Place--Carry a wallet. I don't care if it
ruins the line of your fancy suit, or if you feel too girly carrying a
purse. Cash does not belong loose in your pocket(s) or in
little piles around your desk, at the bottom of your briefcase or in
the candy dish/ashtray of your car. Keep your currency in
your wallet, unfolded, and preferably right-side-up and facing the same
direction, in order of denomination. Do I expect you to
re-sort your bills after every purchase? No. But at
least once a day, take ten seconds to straighten out your money.
If you're trying to schmooze the maitre d' at at the
fancy-schmancy restaurant where you're pitching your dream client, do
you want to take the chance of accidentally slipping the guy a $1 (or
worse, a Bed, Bath & Beyond coupon)?
Create a
Bill-Paying Center--Keep a basket with all your
bill-paying essentials—calculator, stamps, return-address labels,
envelopes. Put it where you pay your bills…and put your bills
there as soon as they arrive, in chronological order of when they're
due!
You have probably already heard how strongly I feel about using a tickler
file. Whether we're talking about personal or
business bill-paying, storing your to-be-paid bills in either a
standard, store-bought
tickler file or one you make yourself (with 43 folders) will
work miracles toward keeping your bills orderly and ready for your
attention.
Create a Filing
System for Archiving Your Records--You need to have the
following to keep your records straight:
- File folders or 3-ring binders for bank statements and
investment accounts, maintained in reverse chronological order
- A file for
every account payable where money is going out—household
bills like phone and cable, credit card bills, loan payments—and for every source of income
- Files for past tax returns and supporting materials
- Files for the current
year's tax preparation-including any W2s & 1099s
you get in January, as well as for receipts for business expenses,
charitable donations and medical expenses you get throughout
the year.
If you're married, make sure your spouse knows how the finances are
organized and the passwords for online account access. For
more on keeping passwords straight, take a peek at my blog
post from 10/14/08.
3)
MAKE AN APPOINTMENT to handle your bill paying and filing
Give your finances the respect they deserve—schedule time on the
calendar to pay bills and organize your finances just like
you would for a doctor's appointment. Don't merely write the
task on your calendar; keep that time sacred.
Have all your resources prepared so that everything you need is in its
home for when you start paying bills. I encourage scheduling
a weekly bill-paying day; for example, Tuesdays. Then, each
time a bill arrives, pop it in the slot of your tickler file that
corresponds to the Tuesday prior to when the bill would need
to be mailed, if you mail your bills. If you pay
bills online, select the Tuesday prior to when the bill is due.
(Why Tuesdays? Mondays are when we have most of our
national holidays, and Fridays are when we tend to take long weekends.
Neither makes a good bill-pay day due to the likelihood of tasks
getting "bumped" for life. Tuesdays are also early enough in
the week that if you are delayed, you still have a few good days to
"slide" your work forward in the tickler file.
On your scheduled day, pay your bills, file your paperwork and shred anything with your
social security or account numbers if you aren't going to
be filing it.
Commitment is key—it doesn't matter whether you use paper checks and
the register you get at the bank, or online bill-pay and software like
Quicken or Microsoft Money. But you do need to keep track of
checks, debit card purchases and ATM withdrawals on a regular basis.
4)
GET AN ANNUAL CHECK-UP TO STAY FINANCIALLY HEALTHY
Plan one weekend a year, perhaps right after you file your taxes, to
check the health of your finances.
• Go to AnnualCreditReport.com
to get free credit reports from Equifax, Experian and
Trans-Union. The federal government requires that consumers
get free access to their reports each year, but you should also pay
once per year to get your FICO credit score. This helps you
make certain you haven't been a victim of identity theft, and also
assure that no mistakes go unchallenged.
• Review whether you are carrying enough
insurance, especially if you've added new family members or income
levels have changed.
• Confer with a financial planner or
experienced friend on the balance of your investments to see if you're
on target or to create a plan for the future.
In summary, the best system for handling bill-paying is a simple one.
Make sure you open your mail every day and store your
bill-paying tools where they are easily accessible on the days you
schedule for addressing financial tasks. Monitor your
financial health and keep up your financial maintenance, just like
you'd visit your doctor and dentist and perform daily tasks to maintain
your health and hygiene.
Be healthy, wealthy and wise.
--
Julie Bestry, Certified Professional Organizer®
Best Results Organizing
"Don't apologize. Organize!"
organize@juliebestry.com
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