10 Step Financial Organization Process

Your Financial Organization Process In 10-Easy Steps!

Great Financial Organization Process Check-List For Home and/or Business!

Your up-front time will feel like – F O R E V E R, but your back-end time will feel like an absolute breeze once you get your Financial Organization Process system set up and running!

Let’s get started!

1 – Collect your important paperwork and make a folder for each of these categories:

  • Checking Account information – Include banking Agreements and policy changes info.
  • Credit Cards – Make copies of front and back of credit cards so that if you need to reference the banks 1 800 telephone number and CVC number on the back to report them stolen you can do that quickly and easily.
  • Estate Information – Will, Power of Attorney, Directives, etc . . .
  • Insurance Information – All Insurance (life, health, disability, house, auto, critical sickness)
  • Investments – includes stocks and bonds information
  • Loans – All loans with an outstanding balance
  • Mortgage
  • Personal Line or lines of Credit
  • Retirement Pension or Retirement Savings account and information.
  • Saving Account Information.
  • Tax Returns – One copy for each of the last seven years.

2 – Clear an area where you regularly sit to pay bills to hold two baskets to put incoming mail.

Mark each of these two folders in your first basket:  Separate mail according to payment  date

  • Folder 1:  1st – 15th (Pay these bills on the 12th of each month)
  • Folder 2:  16th-31st (Pay these bills on the 28th of each month)

TIP:  Whatever date you pay bills on, always pay bills on the same day each month.  Regular habits become easier when they are, ‘regularly scheduled.’

Mark the second basket “To File” and set aside one time a month to file for ten minutes.  Always perform this step the same time each month so that it becomes a habit faster.  For example – Always file on the day you pay your mortgage or rent.

TIP – If you get marketing materials for credit cards and promotions, put them back into the postage paid envelope and mail them back to the company with big red lettering across the top that says, “not interested.”

TIP – Recycle other marketing materials but first remove your name and address so that you aren’t an easy target for identity thieves.

3 – Gather your Bills and make a summary sheet of them

List bills according to what date they must be paid by.  If bills are set up with your bank to pay automatically from your checking account put an asterisk beside them and make sure to enter them in your checkbook regularly.

If you have an ongoing payment plan for things like tax payments, keep recirculating that bill into your folder 1 or folder 2, according to the date the payment is due so you don’t forget to make that payment and keep a tally of the decreasing balance on the bill itself – attach a tally sheet onto the bill if you need the room to write payments down.

TIP – always pay bills in the same place once a week.  Keep envelopes, address stamps or labels, postage stamps, tape, calculator tape, pens, pencils stocked and on hand for that purpose.

TIP – Before you file a bill as paid Record on the paid bill:

  • Check Number
  • Amount Paid
  • Date Paid

4 – Get set up at your bank for online account viewing and bill payment.

You’ll be able to check account balances, payment histories, make any transfers you may need, spot inaccuracies and mistakes and deal with them much faster.

Tip – Change your banking login password regularly and do not give out any information about it to anyone.  Keep a password log near your desk for handy reference.

5 – Reduce your banking fees by keeping a minimum amount in your checking account that you do not touch.

If you are constantly over-drafting your account you will eventually lower your credit rating because of it.  Guard your credit rating like a safe!

6 – Pay yourself First

Deposit some amount – any amount on a regular basis to a savings account that you do not touch.  Tax refunds and overtime at work do not count as ‘regular basis’.

Make this step an automatic payment – like a payroll deduction  – to your savings.

Now leave it there so that when you have an emergency car repair you can afford to have it done timely.  You’ll avoid interest fees on emergency credit card purchases and still earn interest on your money in savings.

7 – Reconciliations

Take care of Checking, Savings, Credit Cards and Loan Statement Reconciliations once a month – Same time every month.

  • Review all statements for any bank errors or overcharges
  • Reconcile your statements to your check register
  • Contact the bank about ANYTHING that looks funny.  Ask questions.  It pays to be curious and establish a relationship with your bank and banker.

8 – Stay On Track every three months:

Meet with your partner, spouse, family about expenses.  Have “Money Matters,” group discussions about how you are doing, where you are going, goal-setting, and anything else along the way – problems, solutions.  This is going to be a long conversation so schedule it during a time when there will be no other distractions.

9 – Review at the end of the year

  • Budget Expenses
  • Actual Expenses
  • Cost Differences
  • Budget limits
  • Budget Overages
  • Ways to cut costs

Make a  four column chart for expense category (office supplies, etc . . . ), Budget Amount, Actual Dollars Spent, Difference Amount – Enter these amounts monthly and have an end of year chart to review.  Track Expenses so you Stay On Budget!

CATEGORY BUDGET $ ACTUAL $ DIFFERENCE
Office Supplies 500.00 540.00 -40.00
Telephone 600.00 580.00 20.00
TOTAL 1100.00 1120.00 -20.00

10 – Purge and File

  • Get rid of unnecessary files at the end of the year
  • Recycle files that are ongoing for the following year
  • File in an Archive box, those things that are necessary to keep for tax or audit or budget reasons.  Label your archive box with a list of files in the box, the date they are filed and the date to purge or destroy them from your records system. Before you Toss your records-Read THIS!

Invest in software if you need to for your Financial Organization Process Sanity!

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