Decluttering and getting organized are not just concepts that apply to your home – they can apply to your finances as well. If you have:
– missed paying bills on time;
– been surprised to have a credit card payment declined;
– paid penalty interest and late fees on cards and accounts; or
– been late filing taxes
then chances are you need to declutter your finances.
There can be a number of reasons why finances become disorganized, including being overrun by paper clutter, not having a budget, and being generally disorganized. The good news is that you can take steps to overcome those problems.
Step 1 – Paper clutter
Like any other clutter in your home, paper clutter can seem overwhelming. But you can tame it one step at a time. Don’t try to sort it all out in one go – if you have piles of paper to sort through, allot yourself a certain time in which to tackle it – 30 minutes a day is a good start. You’ll need to have a few things before you begin:
– a container in which to store the papers you are getting rid of ( a box or bag will do);
– a container in which to store the papers that need to be shredded in order to avoid becoming the victim of identity theft (bank statements, anything containing your confidential information);
– a container (a tray or basket) in which to store the papers that require urgent attention;
– containers in which to store the papers that you need to keep but don’t require urgent attention (like receipts, warranties etc); you will need to sort these into categories like tax, health, warranty booklets; if you can’t do this right away, then one container will be fine, so long as you follow through and re-sort later!
– a system to store the papers you need to keep (filing cabinet, ring binder, concertina folder, or trays etc).
Your aim should be to quickly assess each piece of paper, handling it ONCE, and putting into the appropriate container. Pick it up, assess it, sort it, move on to the next one, even the papers that need to be dealt with urgently – this is an organizing session, not a dealing-with-it session! When your allotted time finishes (set a timer or alarm), stop. Take the papers to be thrown away and throw them away. Put the papers to be shredded near the shredder. Put the papers that need urgent attention somewhere where you’ll see them and make an appointment in your diary or calendar to attend to them. If you have storage solutions for your other non-urgent papers, put them away – if not, schedule a time in your diary or calendar to arrange an appropriate system. Continue these sessions until there are no more papers waiting to be sorted.
Step 2 – Making a budget
This doesn’t have to be complicated. Basically, you need to know how much money is coming into your household and how much is going out. You can do it on paper or on the computer, whichever you prefer. Your goal is to list all your income and all your expenses, then break them down into weekly, fortnightly or monthly – it’s probably easiest to align it with your pay period, so if you get paid weekly, calculate your expenses as a weekly figure. Once you’ve done this, you’ll know why you may be missing payments or overspending – is it because you’re spending more than you earn? Your budget will tell you that. Or is it because you overlooked the due date? Your paper decluttering session will sort this out for you.
Step 3 – Staying organized
Once you’ve sorted out your budget and organized your paperwork, you need to set up a system for yourself to stay organized. Open your mail daily and sort into the same categories as when you were decluttering (throw away, shred, urgent attention, keep but not urgent) and then attend to it or store it as appropriate. Have somewhere to keep bills and documents like invitations that require a response or a payment (near your checkbook, envelopes, stamps etc is good). Schedule a time each week to attend to these matters. Keep your finances decluttered and the paperwork tamed, and enjoy the extra time and money you’ve saved!