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8 Simple Tips for Organizing Your Finances

Disorganized finances can make it difficult to plan and set your goals. Following a pattern of established management guidelines can help you stay on-top of your financial situation throughout the year. Whether you need to overhaul your budget, assess your credit standing, or get a better handle on your investments, stick to these 8 daily habits to make it easier to manage your financial life.

1. Trim Expenses

Many people have expenses for services they rarely use. Look at every withdrawal that is made from your financial accounts during the month. Is there a gym membership that you’re not using? Or could you change your cable subscription to a cheaper package? Is there anywhere else you could cut expenses? Sit down with your monthly spending report and see where you can and absolutely cannot cut costs.

The number of outflows you trim from your budget can be put into your retirement account or an emergency fund.

2. Consolidate Accounts

People often accumulate multiple financial accounts, which can increase the burden of managing them. It also creates more opportunities for cybercrime.

It’s difficult to figure out how well or how poorly your nest egg is performing if your retirement assets are spread across multiple accounts. Consolidating as many accounts as possible will make performance evaluation a simpler procedure.

3. Make a Filing System

Whether you store your important documents electronically or in hard-copy format, it’s important to safeguard and organize them. Have you ever asked yourself if you should continue holding onto your financial paperwork? A good rule of thumb is to remember three, seven, or forever.

Files needed to be kept for three years are documents such as household bills, credit card statements, or receipts for minor purchases. Documents that should be kept for seven years are things like bank statements, pay stubs, and tax returns. Receipts for major purchases, annual investment statements, insurance policies, retirement account statements and anything else of great importance should all be kept forever.

While only you can know what system works best for you to store these records, make sure to keep it simple, clean out your files once a year, and keep them all in one place for easy access.

4. Set Goals and Monitor Them

One of the key principles in money management is to establish goals for yourself and track your progress towards meeting those goals. For example, if your aspiration is to save a certain amount of money for retirement, then you can set monthly and annual savings targets or a goal for a specific account balance and regularly examine your progress towards these goals. If you’re not putting enough away every month, consider reducing expenses in other areas of your life. If your account balance doesn’t reach your target by the end of the year, perhaps you need to speak with a financial advisor about a different investment strategy.

5. Keep an Eye on Your Credit Report and Score

Your credit report impacts many areas of your financial life. It determines if you get approved for a credit card or obtain the best interest rate on a home mortgage. The higher your score, the more financial strength you will have. To increase your score, try to keep old accounts open, pay down credit cards to less than 30% utilization, and make your payments on time.

In the not-so-distant past, you had to pay to access your credit report and score. Thankfully, today both are available for free from a variety of sources. At AnnualCreditReport.com, you can download a free report once every twelve months from each of the three major bureaus.

6. Consider Using Financial Software

If you’re still using paper, pen, and a calculator to manage your finances, you may want to consider upgrading to financial software. Many software programs are able to do much of the work for you, and several of them are free. Some of the available tools include a budgeting goal tracker, a bill payment center, an investment tracker, and budget alerts. Some good apps include Honey, Mint, and iXpenseIt. These can all be used on your smartphone or desktop computer.

7. Set up Automatic Bill Pay and Savings

Missing a bill or late payments are usually met with a steep fee, and that’s money that could have gone to a better cause. To avoid this situation, set up automatic bill pay. Many online financial institutions provide this service, and oftentimes there is no charge.

It’s equally possible to set up recurring transfers to bank and brokerage accounts. You can pay yourself first each month, and by doing so, you will quickly build an emergency account and retirement savings.

8. Team up with a Financial Advisor

Sometimes the best way to find success is to bring a professional on board. Financial professionals are able to offer advice on a wide range of issues: retirement, estate planning, insurance, taxation, and more. With an expert guiding you down your financial path, you’ll be better able to make informed decisions that produce superior results.

The tips in this article are pretty simple and don’t require an exorbitant amount of expertise. By incorporating these changes into your regular money management routine, you may have less stress and more financial success. If you need help with any of these organizing tips, please feel free to reach out to us to see how we can help.

Sources

https://theretirementsolution.com/6-steps-to-organizing-your-finances-in-2019/

https://www.mymoneycoach.ca/blog/6-steps-spring-cleaning-finances-organizing-your-finances.html

https://www.mfs.com/content/dam/mfs-enterprise/mfscom/heritageplanning/infosheets/hp_fborg_flye.pdf

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.

This material was prepared by The Oechsli Institute, an independent third party, for financial advisor use.