Organizing Your Personal Finances: Steps to Getting Control of Your Receipts, Statements and Bills

One of my top requests as a Professional Organizer is to help clients organize their personal finances. For many of us, the myriad of bills, receipts, and statements that enter our homes are quickly overwhelming us. It’s hard to keep track of all that information if you don’t have a good system in place to manage it. Here are four simple steps to help you get your personal financial papers organized:

1. Gather it up. The first step to organizing your finances is to get all financial-related information in one place. If your personal financial papers are currently piled into paper bags, stuffed in shoeboxes, and dominating your desk, start by putting all the various bills, receipts, and statements in a box or pile. It’s much easier to organize when all your information is in one spot!

2. Sort and separate. Now that your papers are all together, it’s time to sort them into categories. The simplest way to organize personal finances is to separate tax-related items from ones that you won’t be claiming (ask your tax preparer for more information about your specific situation). From those two main financial types – tax/non-tax, your papers will start giving you clues to some broad categories – utilities, electronics, auto, home, etc. Create piles for each of those categories.

3. Find homes. Now it’s time to create dedicated spaces where your financial papers can live. Purchase an accordion folder and some hanging files. Into the accordion goes your tax-related info – one tab for each sub-category. The benefit of the accordion folder is that it can be easily stored for safekeeping when the tax year is over. Your non-tax-related financial information goes into the hanging files – one file for each of non-tax-related category. Continue filing receipts, statements and bills into their new homes as they come in.

4. Track it. Once you have all your financial information sorted, separated, and filed, it’s easy to take the next step and track where your hard-earned cash is going. Easy-to-use computer programs like Quicken or Money take your previously-organized financial information and let you generate budgets, reports, and projections – letting you stay in control of your financial life.

If it’s been awhile since you last organized your finances, or if it’s your first time doing so, I know the process can seem daunting – but it can be simple if you take it step-by-step. Getting your finances organized can be incredibly empowering – and the process can be easy if you follow the guidelines above.

Lessons Learnt About Personal Finances

Paying attention to one’s personal finances is a crucial and essential part of life. I’ve seen too much and experienced too much pain, anxiety and heartache over money and personal finances that I really feel I need to share with you what I’ve learnt over the years about money and finances.

Lesson #1: Money and the lack thereof is a mental thing. It’s those beliefs about money that has been instilled into our psyche from a child that either limits or empowers us. The sooner we can change our beliefs about money, the sooner we’ll improve our personal finances.

Lesson #2: We have not really been taught about money and finances. Let’s face it, the formal educational system does not teach us about how to create money, or how to invest it, but only how to account for it.

Lesson #3: We depend too much on others for our financial well-being, whether it be the government, the financial system, our boss, our spouse; hence we have failed to create our own wealth.

Lesson #4: In order to create wealth we must break free of our fears, educate ourselves, step out in faith and do something.

Lesson #5: We must be willing to persist at a task and not give up. Too often we become impatient with the length of time it’s taking to see positive results and so move on to something else. If we simply learn to focus on one thing long enough and put in the necessary work, then we’d see positive changes in our finances.

Lesson #6: It’s hard to create wealth all by yourself. There’s no way that any one person can create substantial wealth without utilising the knowledge and skills of others.

Lesson #7: We must always be educating and improving ourselves. We can learn a whole lot just by reading books, newspaper articles, ezine articles, and not just from conventional sources but also from unconventional sources so that we can get a comprehensive view of financial matters.

There has been so much happening in the economy in recent times with debt, money, currency values, and investments that now more than ever, it’s time to get rid of our limiting beliefs, change our ways of thinking, step out of our comfort zone and, do what we need to do in order to improve our financial lives.