Establishing Financial Routines

Managing money can be something of a juggling act. A good juggler keeps all the balls in the air easily, sending each of them around their orbit with a small push at the right time. Drop one ball, however, and the whole act bounces to a halt until you can retrieve the balls and set them in motion once again.

It’s the same way with managing household finances. Filing receipts and paycheck stubs on a regular basis means you know where they are when tax season arrives. But if you shove stacks of paper into odd corners month after month, expect to spend days playing hunt-down-the-statements when April 15 rolls around. The secret to staying organized with your finances is in the routines: small, regularly scheduled sessions that maintain momentum in your financial life cycles.

Establishing simple routines for mail handling, bill paying, and filing cuts the time and trouble it takes to manage household finances. Your accountant, not to mention your spouse, will thank you if you keep up with the business of your life on a regular basis.

Mail and Paper Handling

Each day, sort the mail as it arrives. At the trash and recycling area, dump catalogs you don’t want, magazines you don’t read, and junk mail you didn’t request straight into the recycling bin, reserving only unsolicited credit card offers. These will need to be shredded to prevent identity theft, so they require further action.

If you still receive physical copies of bills and credit card statements, open the envelopes and divest them of their clutter of promotional inserts and extra pages. Save space in your files by retaining only the statement itself and the return envelope.

Sort remaining business mail straight into a set of action files, depending on whether you need to pay, respond, file, or decide what to do about each item. Finally, pass along personal mail for other household members, adding it to their launch pad or personal action file folder so they know where to find it and can retrieve it.

SPEEDY SOLUTION

Use a letter opener to skim open letters, bills, and bank statements. An old-school tool that’s still sharp, a letter opener opens envelopes quickly and cleanly without damaging the contents.

Bill Paying and Financial Management

In the old days, when bills were delivered by snail mail and banks took several days to process paper checks, paying bills once or twice a month was a possibility. In today’s fast-paced, electronic climate, haphazard bill paying is a surefire way to rack up late payment charges and trigger interest rate increases.

Decide how frequently you will check your finances and pay bills. A weekly routine should keep you on top of money matters; if you do your banking online, it may be more comfortable to check bank balances and scheduled payments daily. Either way, add a bill-paying session to daily or weekly routines to keep the financial pipeline flowing freely.

To make it easy to remember who must be paid when, rely on a page-at-a-glance record of monthly household bills. Write out a list of bills on a sheet of paper or the free printable bill tracker from OrganizedHome.com, or set up a list in your financial-management software program. For each item, note due dates and payment amounts.

Automate your financial life with electronic bill pay. It offers 24-hour convenience and cuts the costs of postage and paper checks. If you’re not yet paying bills online, add one or two new payments to your bank’s online portal each month. Within a year, you’ll have made the transition to paperless without much effort.

Once online, make bill paying automatic whenever possible. Setting up regular, scheduled payments heads off late payment fees and makes it easier to set up a budget. For bills with a variable amount, estimate a ballpark figure for what you’ll owe each month and schedule payments anyway. Tweak each month’s payment amount as bills arrive.

ROAD HAZARD

Paying bills and handling banking online is wickedly convenient, but internet transactions can and do go wrong. Bookmark banking websites and check them regularly, or use a smartphone app to keep close tabs on automated accounts. Head off problems at the pass, not after the money has flown!

Filing

For many folks, filing paperwork ranks right up there with dental work in the “I don’t want to!” category of dreaded activities. Nobody disputes the value of a well-maintained set of files, but no one except the most extreme filers enjoys the process of creating one.

Take the trouble out of the task by setting up a simple, dynamic trio of household files that will automatically shunt paper from arrival to action, and from reference to retention (an organized household filing system is outlined in the next section). Then build your filing speed and prowess with some quick tricks to short-circuit the process and turf piled-up papers quickly.