Guest Poster: Matt is a freelance writer for MoneyChoices.com.au, an independent website where home owners can find a choice of refinance home loans from a range of Aussie banks. Click here if you would like to read more of his writing.
One of the most overwhelming chores facing any household manager is financial organization. The flood of paper feels overwhelming and gaining the upper hand seems impossible. Follow these ten basic steps to gain control over your personal finances and set up a workable system to stay on top of them month by month.
1. Gather the paper – Start in one room and gather all the paper. Work through every room as you gather all the paper into one area. Use a trash bag to immediately toss everything that is obviously unnecessary. Choose one place within the home that will serve as the financial center.
2. Purge all the clutter – Once all the paper is in a central location, begin a detailed pass through every page with the intent of purging more than 70 percent of the paper. Set up three boxes; one for trash, one to recycle and one for shredding. Follow the legal requirements for tax documents and remember most bank statements can be accessed online. Shred all paper that contains personal information.
3. Decide on a method – Paper accounting sheets are still created, but many people are finding great online tools like Mint.com that enable them to manage all of their finances with much less effort. Choose the method that is best for your household and learn everything possible about that technique.
4. Gather the right tools – Hanging file folders, manila folders and some labels will be required to organize the essential papers. For the electronic approach (like Mint.com and The Paper Tiger.com) open the appropriate accounts. These two sites offer complete financial management software and a very creative file manager that will aid in tracking each piece of paper.
5. Use a calendar – A paper or electronic calendar should contain reminders for bill due dates, gift occasions and major holidays that will require funding. Advance reminders can be used to trigger actions that will ensure every date is met with all preparations completed.
7. Set goals – Determine the family’s financial goals and assign timeframes for each. Work toward each goal by saving sufficient funds to pay cash for small and large purchases. Include the entire family in reaching the goals so disputes are avoided.
8. Schedule time – Managing the financial life of a family requires time at regular intervals. Some people require large amounts of time, but others can manage well with small increments spread throughout the week. Block out time in the schedule for financial activities.
9. Work as yourself – Regardless of all the advice that is offered, make choices that fit your own personality. Combine the best tools and create a system that works for you and your family. Make changes as time passes and correct anything that just does not work.
10. Maintain the system – Consistent interaction with the files and all the new paper arriving almost daily will keep the household finances organized over time. Monitor the health of the system and invest extra time in the earliest months to learn how much time will be required.
Learning a new approach to managing the household finances will take time. Allow for the adjustments in the family schedule that will be required as you invest time in learning new tools and purging the files. Enlist the help of other family members to sift through mail and keep the bills paid. Even small children can participate in some of the simplest tasks.