When your finances are disorganized you can find yourself falling behind on bill payments or eating into savings because you don’t have a clue how much money you really have at your disposal and even occasionally running into overdraft. To avoid the financial messiness that comes from a lack of organization try implementing the following tips.
Choose a System that Works for You
The first step to organizing your finances is selecting a system that fits your lifestyle. There is no point spending a fortune on a software program to manage your money if you are inclined to pick up a pen and paper and getting on the computer always seems like a chore. Choose a system that you are sure to use whether it is a simple notebook with columns for expenses and income or a sophisticated program with the ability to forecast future savings.
Consolidate Accounts (Credit Cards)
Instead of having several small accounts to track, keep it simple and consolidate them in one place. This means you get only one statement and you can track your withdrawals and deposits to get a real picture of what you have and what you spent. The same approach works for your credit cards. Maintaining only one credit card; preferably one with a low finance cost and airline miles or cash back incentive, means you are less likely to go over your limit.
Take Advantage of Automatic Payments and Transfers
Automatic bill payments and account transfers can take the hassle out of staying on top of your monthly expenses. They usually cost only a minimal fee, so it may be well worth it if the alternative is paying hefty late fees and incurring interest costs.
Make Time to Update Records
The best designed system in the world will only get you so far. You need to make the time to actually use it, input the data and update your records so they make sense.
Be Ready for Tax Season
Finally, instead of going crazy at tax time keep a file with all the pertinent data throughout the year so it is easy to put together before the deadline. Whenever you collect a receipt that may be deductible it should go in your tax file so you won’t forget to claim.
Organizing your finances doesn’t have to be a gargantuan task. If you start with a well-planned system and simply follow-through you’ll get the results you want and it won’t be hard to stay organized throughout the year.
