1. Organize Your Accounts First
Before we get into your bills, we first want to list out any and all accounts you have. Keep in mind that these are only the ones that have monetary value; insurance doesn’t count. List out every account and how much is in it:
Banking - checking, savings,
Retirement - 401k, 403b, IRAs, TSP
Debt - credit cards, auto loan, mortgage, personal and student loans
Investments - peer-to-peer lending, brokerage
Now that that’s done, it’s time to organize them in a way where you can easily update the balances and keep track of transactions.
2. Find a method that works for you.
There are 3 ways to organize your accounts and bills: Spreadsheet, Software or Online. Let’s go over each one so you can decide which suits your lifestyle the best.
Spreadsheet - You’re probably already familiar with this. It’s the traditional listing method that Excel is most known for. If you’re confused on where to start with a blank sheet, download this free budget spreadsheet.
Software - The most popular budgeting software is Quicken; most of you have heard of it. However there are alternatives, like Moneydance and Pocketsmith. This is the most popular method for keeping track of financial records. By using software instead of Excel or Google Sheets, you can cut out a lot of manual updating. The software will do that for you! Now you can update balances and download all your transactions. Downloading any of these is guaranteed to save you a lot of time - and money.
Online -These are very similar to your software options, except that they're only online - no downloading required. And the best part is a lot of good ones are free! Check out this list of the best Quicken alternatives that won’t cost you a dime to use.
3. Keep Track of Online Bills
Most people prefer this method nowadays, and it’s easy to see why. The money comes straight out of your account and pays the bill on time, every time. Without you having to even think about it. You’ll never accrue late fees again! This became popular when most businesses realized they could send bills online, and skip the lag time from snail mail, and cut mailing costs. Going financially green is great, but can also get confusing. As convenient as it is to get your bills emailed to you, there is a drawback. If you’re an average person, you probably get around 20 emails a day. If you have your own business, then it’s a lot more. Which means those electronic bills can easily get lost and forgotten about. Each time one comes in, be sure to add them to whatever spreadsheet or organizing software you have in place. This also goes for automatically paid bills. There can be a lot of variable ones, and if you lose track of what’s coming out of your account, you could end up paying for things you stopped using months ago.
4. Keep Track of Bills in the Mail
Find a spot in your office, or a designated area in your house, where you place bills that need to be paid. Every time you get one in the mail, put it in that place. Once a week, go through those bills and pay them. Have your spreadsheet open at the same time so you can check them off as you go. Once that’s done, file or scan the statements (more on that in a bit), and recycle the rest.
5. Create a Home Filing System
Now that your bills are paid, it’s time to file them. But how? And do you have to keep them all? The answer is no, but you should hold on to some for a while. Most bills, like your utilities, can be thrown away after six months or so. But you have to hold onto your taxes for at least three years. Though it’s probably best to keep them for life. There are two ways to file your paperwork: physically and digitally. Let’s go over each one.
Physical Files - There are upsides to doing it old school. You don’t have to boot up or charge your filing system; just go to the folder and find what you’re looking for. However, there are a lot of downsides. For one, filing cabinets take up A LOT of space. And are usually a messy bunch of papers shoved into a series of drawers that you probably dread even looking at. Also, if worse came to worse and your house caught on fire, you’d lose everything. But if you still want to keep a paper filing system, then keep reading.
Find categories you can turn into separate folders, like utilities, car, house, credit cards, etc. Within each of those folders, make a more specific folder. If you have two cars, make a folder for each. Make one for each utility: water, gas, electric. Then within those folders organize the bills by date. Be diligent about the labeling for every single folder. There’s no point in organizing everything if you can’t easily find it.
Digital Files - As easy as this method is, the trick is getting all your bills onto the computer in the first place. For that, you’ll need a document scanner. There are several apps that allow you to scan documents from your phone. There is also a scan option in the “Note” app on apple devices. Once you get the files onto your computer, it’s imperative that you create an organization system similar to the physical filing system I just mentioned. You’ll need to put folders inside of folders. Here’s a great example of an effective file structure and clear labeling:
Business Documents
Personal Documents
Archive
Individual – Me
Individual – Spouse
Individual – Kid 1
Individual – Kid 2
Asset – House
Asset – Car A
Asset – Car B
Financial
Agreements
Banking
Credit
Financial Planner
Insurance
Investment
Taxes
Legal
By layering the folders like so, you can keep your desktop and file explorer neat and uncluttered. Now that all your files are digital, you’re free to shred some stuff. Anything you get on a monthly basis is fair game. But there are some documents that you should hold onto, at least for a little while. Things like loan documents and tax returns are too important to shred for some time. And of course you never ever want to shred things like passports, birth certificates, or social security cards. Just so we’re clear.
I hope these ideas help your quarantined space to BLOOM in Maryland and beyond. A special thank you to Erin Neumann for this wonderful guest blog post. Erin is a Professional Organizer from St. Louis, Missouri. After graduating from West Point and serving in the Army, she started Sacred Space Organizing to help her clients live with intention.
