It’s the start of a new year, and what better time than to whip your finances into shape? You may have already abandoned some New Year’s resolutions, but there is still plenty of time to take charge of your financial life.
Organising your finances is the perfect place to start if you are trying to get on a budget, save money or reach financial goals in 2017. Being disorganized when it comes to your bills, your savings and your debt can be incredibly harmful, particularly if you are hit with late fees, overdraft charges or fall behind on your loan payments. These tips will help you get your finances in order to help you achieve your goals.
Create a Space
When you come home at the end of the long day of work, it’s all too easy to just throw the mail onto a counter or table. But when you do this, you risk misplacing important documents or missing payments. Instead of having paper scattered throughout your house, create a separate space where you can pay bills, store financial documents, and review your budget every month.
This space doesn’t have to be fancy. It could be a spot on your desk, or a corner of your bedroom. Whenever a bill comes, open it immediately and pay it — ideally on the same day that it comes. Then either throw the bill away (ideally shredding it first to protect your privacy), file it if necessary. If you don’t have the physical space for a filing cabinet, you can scan the documents and save them on your computer. There are even apps for your phone that allow you to scan documents into PDF files, which can then be sent via email to your home computer. Simple!
Collect Student Loans Information
With automated bill paying options and electronic funds transfer, it’s easy to “set it and forget it” when it comes to student loans. It’s a great way to make sure that your loan payments are always made, but it also makes it challenging to stay on top of your loans and your debt.
Take the time to go through your student loan documents. Make note of how much you owe on each loan, what type of loans you have, and what the interest rates are. Place these key documents in a file folder that is easily accessible, and regularly review them to determine if you should prioritize paying off one loan with a higher interest rate and more favorable terms. You can keep a running tally of your student loans on the front of the file folder, along with any changes in interest rate for variable rate loans. That way, you’ll know exactly what you owe and how you can best pay off your loans.
Compile Credit Card Documents
Most Americans have at least one credit card, yet they may not fully understand its terms and conditions, or even regularly review purchases when the bill arrives each month. This year, resolve to take charge of your credit card situation by getting your documents organized.
Set Up a System
The best way to stay organized is to have a system in place that helps you keep on top of your goals. No one system works for everyone, so spend some time figuring out what works best for you and get to work on establishing it.
One way to make sure that you are keeping an eye on your finances is to make sure that you can actually see them — or at least the folder that contains your financial documents. You can buy an inexpensive desk accessory that allows you to store a folder upright on your desk. Keep separate folders for different categories: bills, mortgage, student loans, credit cards. Your financial information will be within easy reach and in your line of vision — making it hard to stick your head in the sand when it comes to your bills.
No matter what system you choose, make sure that you are careful about protecting your personal information and identity. Shred important financial documents, including bills, and encrypt or password protect any financial documents stored on your computer. By taking these simple steps, you can be well on your way to a better-organized and more secure financial life.
Amanda Brown is an aspiring personal finance blogger from the United States. She recently graduated from the University of Maine and is working to pay off her student loan debt. She hopes that she can help students avoid the mistakes she made in college to minimize debt after graduation and have a financially prosperous future.