If your idea of keeping track of your finances is throwing unopened bills into a cardboard box, you're probably not alone. While organizing is never fun, neither is finding out that you're overdrawn on your bank account or facing an audit because you failed to keep to a financial obligation. Spring is here, so after you've cleaned out the garage and prepped your gardens, here are seven tips to help you end the financial clutter in your life.
1. Establish Some Goals
Decide at the start what you'd like to achieve by getting organized. Pull out a piece of paper and write down some goals that reach out one, five, and even ten years. Some important goals might include debt repayment, college savings, a retirement plan, and a life insurance policy.
2. Create an Organization System
Pull out that cardboard box or that stack of mail in your home office and get ready for some serious work. There are two ways to organize your financial papers. The first is to use a filing cabinet and label folders according to subject and dates. You can also scan all of your paperwork and store your documents electronically. Either way is fine, but spend some time setting up your system.
If you have items that you don't need, such as old receipts and bank statements, use a shredder to dispose of them. Keep work pay stubs until you receive an annual W-2 and hold onto tax returns for as long as seven years.
3. Check Your Credit
It's always a good idea to check your credit periodically to make sure that it is accurate. You also want to ensure that no one else is using your name or other information. You can get a free credit report once per year through freecreditreport.com. If there are inaccuracies, dispute them with the credit bureau.
4. Begin Keeping a Monthly Budget
Start keeping a monthly budget. While you can use Excel or even pen and paper to create a budget, there are now many free budget apps that have some great features. For example, Mint.com will integrate with your bank account so that you can track your spending in real-time as well as monitor your monthly goals.
5. Pay Off High-Interest Debt
If you have debt with high-interest rates, such as credit cards or even student loans, target these for pay off as quickly as possible. The sooner you can pay off these debts, the closer you can get to achieving other important financial goals.
6. Set Bills on AutoPay
One of the things that can quickly damage credit is forgetting to pay even the most minor bill. If you have utility, car insurance, or other bills that come due each month, put them on autopay and then schedule calendar reminders for yourself so that you make sure the funds are available.
7. Start Saving
Once you get a budget established, can see where your money is being spent each month, and get rid of some of that high-interest debt, you'll find yourself in excellent financial shape. Take a look back at those goals and start your savings plan. This is also the perfect time to purchase a life insurance policy if you haven't done so already.
Knowledge is power. The more you know, the easier it is to make an intelligent choice. Everyday life, as well as certain events and circumstances, require you to make choices. And peace of mind is gained when you feel good about the decisions you make.
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