In the midst of running errands, summer pool trips, long work days, weekend getaways, household chores and whatever else your hectic summer entails, it's easy to let your finances get a little messy. But that can make the rest of your life feel messy too. It's National Simplify Your Life week – what better time to get your finances in order? Getting organized can help ease some of that stress and give you one less thing to worry about.
It's time to buckle down and tackle that pile of mail sitting on your kitchen counter, those stacks of paperwork on your desk and that dreaded debt. As you work to get organized, the following tips can help you get started:
Alleviate tax-time stress
Keep your receipts and payment records in order to make things easier come tax-time. You'll breathe a sigh of relief if you have your records in order in advance. Also, should the IRS or your Tax Pro come to you with specific questions, you'll be entirely equipped to answer them. For specifics on which types of records to keep and for how long, please see Chief Tax Officer Mark Steber's Huffington Post blog post, "Recordkeeping: What You Need to Know Before, During and After Tax Time".
Craft a plan
Everyone's situation is different, so there's no "one size fits all" plan or approach. Some people like to start out by building a specific budget to track against, while others prefer to begin by organizing receipts and bills. Online tools and a variety of apps are available to track spending that allow you to enter in cash transactions, pending expenses and credit card transactions that have yet to clear. Choose the approach that works for you and dig in.
To truly get organized, you'll need to create a little chaos. To organize your paperwork, take everything – all your piles of papers and mail – and place it in an area that you can use to get a little messy for a while. And know that you may find some things you weren't aware of – like unpaid bills, tax-related documents and credit card debt – so just remember that you're getting organized now to avoid surprises in the future. And, you might discover some gems – like some great coupons!
Keep it simple
Getting and staying organized doesn't have to be hard. You don't need a special organizational system or expensive containers – you can even use a shoebox. Organize your financial documents by category, like home, health care/insurance, saving and investing, taxes and income, credit cards and debts. Use labeled envelopes, folders or containers to organize help your documents make sense to you and to make it easy to get you a start fresh each year.
Stay on track
Do you know what you're spending your money on – and how much – each month? Many of us think we're aware of these rough amounts, but in reality, we have no idea. Tracking your monthly spending can bring to light areas you can save and can help you find new ways to meet your goals – like paying down debt, buying a car or just feeling more in control of your money. Regardless, know that simplifying your finances takes work, so don't get discouraged. Stick with it and you'll see stress start to melt away.
Go with the flow
As with all aspects of life, plan for change. Anticipate future fluxes in your financial situation – whether it be planning for your child's tuition, a new baby, the holidays, a vacation, a new car or house – and plan accordingly for those changes. This may mean you need to place extra money into savings in the months leading up to one of these events. It's important to prepare in advance and avoid being caught off-guard and unable to afford an important life event.
Now that you have the tools and information to kick-start organizing your finances, what are you waiting for? Get started on simplifying your life today.