10 Tips to Make Organizing Your Finances Easier

Personal finances can get messy fast. Bills pile up, paperwork gets lost, documents get misplaced and before you know it, something has slipped through the cracks. Knowing how to organize finances is an essential life skill, whether it’s using a document organizer or a digital solution. 

Thankfully, there are ways to create a home finance and bill organizer that will make the task easier, and, eventually, it will feel like second nature. When your finances are organized, not only do you know what you have and what is missing, your family knows where to find important information if you’re not able to help them. 

So, here are 10 ways to simplify organizing your bills and documents that can help give you peace of mind. For a status check on your financials as a whole, you can reach out to a Farm Bureau professional anytime.

Tip 1: Create a Dedicated Space for Managing Your Finances

A place for everything, and everything in its place! If you are a paper bill keeper, designate a space in your home where you can budget and plan. It could be an entire room, but more likely, it’s just a desk or a dedicated drawer where you store your documents.

These days, most of us receive our bills digitally, so a smart move is to use a digital tool for the same purpose. Services like RocketMoney, You Need a Budget and Copilot are full-service apps that help you track your finances and stay on top of your bills and budget.

Tip 2: Decide Which Documents to Keep

Too many records — physical or digital — can be the downfall of good money management intentions. As a general rule, keep a physical copy and a digital backup of all of this information in a safe place:

• Legal documents
• Social Security cards
• Marriage license
• Wills, living wills and powers of attorney
• Business licenses
• Vehicle titles and loan documents
• House deeds and mortgage documents
• Insurance policies
• Birth certificates
• Valid and expired passports
• ID cards
• Pension plan documents
• Financial Information
• Seven years of tax records and filing receipts
• One year of medical records and bills
• Warranty documents and receipts for large purchases
• All home purchase, sale or improvement documents for at least six years after you sell your house
• One year of pay stubs and bank statements
• Annual insurance policy statements
• Social Security statements
• Retirement plan statements

Store these in a fireproof safe to make sure that they’re protected from disasters as well as thieves. You can scan or snap clear pictures of all of these documents, then keep them in an encrypted folder on an external hard drive and store it in a safe at a local bank or other similar location to make sure that you always have a backup.

Shred everything else. Once you’ve paid a bill, there’s no reason to keep it. Shred anything containing personal information like your name, address, phone number and banking details. You don’t want your data falling into the wrong hands.

Tip 3: Create a “Budget Binder” to Organize Your Monthly Expenses

Start a dedicated folder (whether physical or digital) to organize your bills, budget and additional documents, like veterinarian bills, kids’ sports registration fees and warranty information. Tracking all your deposits and deductions will indicate where you’re spending.

A budget binder is also the ideal spot for a financial calendar. Plot upcoming paydays and bill deadlines to help you visualize your expenses. If you’re doing this digitally, a dated folder on your computer and a dedicated calendar in your calendar app of choice are great options.

Tip 4: Prioritize Your Bills

When you get paid, where should your money go first? Determining how to spend your money important part of budgeting. A standard way to prioritize would be:

1. Mortgage or rent
2. Utilities
3. High-interest credit cards or loans
4. Low-interest credit cards or loans
5. Other bills or recurring payments

If your bills arrive on paper, you might want to physically stack them in this order. If they arrive digitally and you use a budgeting app, perhaps you might arrange their entries in your app in this order. That will help you visually prioritize where your money goes. 

Tip 5: Schedule Time to Review Your Finances

Set aside time each pay period to review your finances and upcoming expenses. Developing a routine will help you prepare for what’s ahead, eliminating costly surprises. Each quarter, schedule time to think about big-picture financial questions. Should you start building a bigger emergency fund? Is it time to save for a new house or car? Are you ready to contribute more to your retirement?

Tip 6: Consider Automatic Deductions

Putting bills on autopay can help you stay on top of them. That means you might reduce the incidence of late fees and establish a consistent payment history that improves your credit score. But it also means you need to plan ahead to have the necessary funds available each month for predictable bills such as mortgage or rent payments, credit cards and car payments.

The paperless convenience isn’t worth it if you’re overdrawing your account. Set up calendar alerts before your bills are due to make sure you have adequate funds available.

Tip 7: Manage Your Subscriptions

Your subscriptions might fall into a few different buckets, such as music, streaming entertainment, classes or food — but all of them come with a monthly fee. To better manage your finances, it makes sense to take inventory of your subscriptions and get a clearer picture of what you’re paying for. You may even find charges resulting from free trials you signed up for and forgot to cancel. Evaluate whether each subscription is worth what you get out of it, then cancel the subscriptions that do not make the cut.

Tip 8: Consolidate Retirement and Investment Accounts

If you have multiple retirement and investment accounts, you might think about combining your 401(k)s, IRAs and other accounts accumulated over the years. Consolidating your accounts can provide a simplified view of your portfolio and financial outlook. You’ll have lower transaction, administrative and other account fees, and tax preparation and retirement planning will be easier, too. 

Tip 9: Choose Your Lines of Credit Carefully

Lines of credit can include credit cards, personal lines of credit available at banks and credit unions, personal loans and home equity lines of credit. Limiting your lines of credit is a good rule of thumb when it comes to keeping your personal finances organized. Also avoid store credit cards, which frequently have low credit limits and high interest rates — both potential hazards for your credit score.

Tip 10: Get Support From Someone You Can Count On

Managing your finances can be daunting, but you don’t have to do it alone. Your Farm Bureau agent is always here to help. For more financial planning tips, reach out to your local Farm Bureau financial advisor to talk about ways to plan for your future.