22 Nov 2012 9 Comments
Excuses. I hear them all the time.
“I would totally start investing in my company plan, but the forms are somewhere in my house.”
“I was charged overdraft fees because I didn’t realize that my other bills came in at the same time.”
“I would definitely figure out how much debt I had if I knew where all my bills were.”
Unless you have a great memory (I definitely DO NOT), I find that having everything organized, and in one place, really helps get you into financial shape. If you have no idea when your money is expected to come in and out of your bank account, you will always get gouged by the bank’s overdraft charges and fees.
So do yourself a favour, and get your s*** organized before the new year. Think of it as a present to yourself!
1. Clear out an area in your house that you will designate as your workspace. If you choose to use your computer desk, ensure that there is ACTUALLY a clean spot on it to use.
2. Gather all your bills and TAKE THEM OUT OF THEIR ENVELOPES. You may think this is a moot point, but you have no idea how much time I have spent going through bags and bags of bills and statements that are unopened. Once you recycle the envelopes, a large chunk of the paper has been removed, so it looks less intimidating than when you first started this process.
3. Get a file folder. Have a pocket for every single one of your credit cards, chequing and savings accounts, investment accounts, as well as your utilities, insurance (car and home/tenant), and company pension plan information. I also have pockets for medical expenses (to claim for tax purposes!) and any other categories that affect your financial health.
4. Put said bills/statements into their corresponding pockets.
5. Find a calender, or just print out a monthly one from Outlook. Fill in the necessary information based on their dates, such as when your paycheque comes through, what bills are due on what day, how much these bills are, and where the money is coming from. i.e. some bills may be paid on automatically on your credit card, and not your bank account.
6. Make this a habit; when a new piece of mail comes into the house, open it immediately, recycle the envelope, fill in the information on your calender, and plop it into the file folder. DON’T LEAVE IT UNOPENED! Once you start a pile on your desk or in your drawer, it will grow exponentially! One of those unsolved mysteries found in every household; very similar to the sock and underwear gnomes.
Once you complete this exercise (it should take an hour or two to start up, depending on how many bills/statements you have) you will have a better idea of what your cash flow looks like during the month. If you find that all your bills are coming in at the beginning of the month, but you do not get paid until the middle of the month, this is probably why the bank is bending you over with their overdraft charges and fees! Knowing when you have money coming in and when you have money due every month will help you plan your cash flow better, and save you tons and tons of fees in the long run!