Have you ever had to search through a stack of paperwork to find something? Getting your “paperwork” life organized not only helps you find things quicker, but it also contributes to reduced stress and could help your finances too.
These days the customary meaning of the word “paperwork” has expanded to include not only the physical papers we get in the mail, but the paperless things we get too. Bills, bank statements, investment statements and other vital information are increasingly being delivered via email. While our desks may look a little less cluttered because of this, the underlying problem of disorganization still remains. A feeling of being overwhelmed takes over resulting in lost focus, clarity and ultimately leading to panic and stress. Under stress, people tend to check their bank accounts less, open and review bills and statements less, fall behind on payments, ignore financial goals and disregard budgets. This becomes a self-perpetuating cycle impacting your financial and physical well-being. So where do we start? How do we tackle something that is seemingly out of control?
Look at that pile. It’s not going anywhere; that is unless you commit yourself to dive into it, and it doesn’t have to be as painful as you think. In fact, this is the easy part. We’ll get to the hard part in a minute.
First, sort. It doesn’t matter where you start, just sort. You can sort by institution, by topic or by relevancy. This is the part where you will get rid of the most junk. When you look at something and see that there really is no purpose served by saving it, get rid of it. Maybe it’s an owner’s manual from a device you no longer own or a bank account you got rid of a long time ago. The idea here is to get that great big pile reduced into many smaller piles. You may end up with just as much paperwork as before, but now you are in the position to handle a much smaller and manageable task, sorting a pile of related paperwork. Sort that smaller pile chronologically and now it’s ready to file.
How do we eat hamburgers? It’s not a pleasant picture, especially for the cow, but we divide the larger thing into smaller things we can manage. It’s a one-time, time- consuming job, but once we have done it we have set ourselves up to never get into that position again. Plus, once it is sorted and filed we will know how to find it again.
Here is the hard part. Remember that I started by saying we are being moved to a paperless society. Institutions where we keep our money are telling us they want to charge us to send paper statements. This is great for reducing clutter and saves them the mailing costs, but if you don’t have a system for this then it can actually be worse. You have to learn how to make a filing cabinet on your computer, how to fill each folder in it and make it just as easy to retrieve the information you need. For this you will need to learn a little bit about computers and hard drives if you want to do it right. Ask for help from a friend or professional because this can be a bigger problem and cause more stress if not done properly. Banks will say you can access statements online, but I have found that rules vary and that is not always the case.
Once the papers are sorted and stored away we can start to figure out how to move forward. Take time to review things and make note of due dates. Companies often stick to due dates that fall on the same day of the month every month. Keep in mind that two of the days of the week fall on weekends, and banks don’t typically process payments on weekends OR holidays for that matter. Always take that into account, because if you pay your bills by autopay, which I discourage, that day of the month may fall on a weekend or holiday more than half the months of the year! If it does and you have scheduled the payment for that date, it won’t get paid until the next business day. Then it is late so penalties and interest will apply. Don’t think banks don’t know this either.
I suggest that you go through several months of bills and note these dates on a chart. In particular, pay attention to the less frequent bills. The insurances, such as auto, health and homeowners policies. If you miss those payments the results could be devastating. Make a chart, make sure you look at it at least once a week and check off when you pay those bills. This gives you time to plan in advance and know what is coming. Resist autopay. Look at what you are paying the companies on your list every month. This way you will see when there are any changes which may indicate a problem that needs to be researched. Gas and electric bills go up and down all year long, but your cable bill shouldn’t. Plus you will begin to understand what point of the year each you spend the most on each utility, and that may help you budget better.
Go back to those folders you have organized. Go into them one by one and on a separate piece of paper write the important information down. The account name, account number and important contact information. If you have an online account for that vendor, write down usernames, passwords, security questions – anything someone might need to be able to go online and access it for you in case of an emergency. This is critical information, so make sure you store it carefully and only let people you trust have access to it. I suggest this type of information not be stored on a computer and you give instructions to those that need to have it. That is a huge topic all unto itself, but start with this approach.
This basic approach will show immediate results and will lower your stress levels. Lower stress levels, higher wealth levels, higher health levels. They are all linked together, so the sooner you start the sooner you will reach your goals.
Scott Silver is a Daily Money Manager whose business is located in Marlboro, NJ. He has over thirty years experience in his own wholesale business, an MBA in Accounting from Rutgers, and has been helping people and businesses handle their paperwork and bills for the last ten years. He can be reached by email at email@example.com or directly by phone at 908-208-2504.