Organize Your Financial Life
I have always believed that you can reduce stress by de-cluttering and organizing your home. This theory can also apply to your finances. Here’s a quick guide to tidying up (“Tidy Up Your Files” by Jean Chatzky)
Mirror your Folders.
If you are managing both paper and electronic bill pay, give the folder in your filing cabinet the same name as the file on your computer.
Know what to keep and what to toss.
It is just as important to understand what to save as what to purge. Example: Anything tax related should be kept at least three years (Seven if it is related to a loss). Keep paperwork for the most recent insurance policies. Keep receipts until they show up on your bank or credit card statement. You don’t need to keep your statements because you can access them online anytime.
Stick to a routine.
Once you have a process that works for you, stick to it! Keep documentation in the same place and pay bills on the same days of the month. Determine if filing weekly or monthly works best for your life.
Gather your tax paperwork year-round.
Use an accordion file to organize your tax documentation as you receive it. Print off any electronic records to keep everything together. The result: When tax time rolls around you will have everything at your fingertips and make tax preparation a breeze.