How to Organize Your Finances By Janice Parker

Are you the person who has a pile of bills and/or unopened mail and continuously tell yourself “I’m going to open and organize that this weekend”? Do you have unopened bank statements and retirement statements creating clutter in a corner or a junk drawer? Are you telling yourself, “I don’t need to open them because I already know what the balances are already”? If this describes you, no worries, I’m going to share some tips that can help you organize your finances!

Finances can be overwhelming and stressful, but when you add disorganization in the mix, you have a recipe for disaster. Tackling this challenge is a matter of taking it on with small steps so that you can feel accomplished and celebrate your wins. Let’s get started on the path to your financial destiny – and yes, it starts with opening the mail.

Step One: Bag or Box It

  • Gather all the financial mail and put it in a bag or box. This includes all open and unopened mail.

Step Two: Sort It Out

  • Use a large and clean workspace
  • Open all unopened mail
  • Put all the mail into three categories:
    • Active/Time Sensitive (current bills that are current and past-due but not yet gone to collections)
    • Closed/Collection (bills that have been turned over to a collection agency)
    • Statements (i.e., bank statements, retirement statements, pay stubs, etc.)

Step Three: Take Action

  • Prioritize the “Active/Time Sensitive” items
    • 1st Priority – Disconnect/Final Notices (pay or call service providers to make payment arrangements
    • 2nd Priority – Past Due (write the date you plan to pay each of these bills)
    • 3rd Priority – Current Bills (review and evaluate them to determine if this is a service you use/need. Call service providers and negotiate a lower rate)
  • Closed/Collection
    • Because collection agencies send multiple mailings, go through and group them together
    • Make a list of all collections and list by 1) collection agency name 2) original creditor 3) amount owed
    • Seek wise counsel before paying collection debt because paying them can potentially do more harm than good.
  • Statements
    • Reconcile your bank statements, so you know what your “real” checking balance is. If you have a ton of receipts stuffed somewhere, take them out and reconcile them. Check your bank statements for fees and contact the bank and ask for a goodwill credit.

Step Four: Create A Filing System

  • Now that you have taken care of all urgent matters and know where everything is, it’s now time to file it all away in a safe place that is water and fireproof. You can also file other important documents in here as well such as birth certificates, social security cards, marriage license, insurance policies and any other important document.
  • Use file folders to organize your monthly debts and label each folder with the debt’s name
  • The system is designed so that you will avoid the big piles and begin filing debt immediately after being paid.

Step Five: Confidently Purge

  • When this process is over, you may have documents you no longer need and this is a good opportunity to shred or purge. Be sure to discard financial documents properly. You should feel lighter already, both physically and emotionally. If your emotions will not allow you to do this all in one day, I recommend breaking the task down daily. Begin on a Monday and end on Friday. This allows you time to pace yourself and give the project the time it needs. Whatever you do, put forth the effort and refuse to give up.

If this is a difficult task for you to handle alone, ask someone that you trust, or call Coach JP and consider Budget Counseling Session with Coach JP. This is a 2- hour session focused on helping clients get to the root of their money issues. In preparation for the session, clients will complete a mock budget form, a questionnaire, and gather all of your bills (opened and unopened) for discussion. During the session, Coach JP will help clients to create a budget and devise a plan of action for your savings. You will receive creative suggestions to manage their money – i.e., changing allocations and adding extra streams of income. Your coaching session can take place in person or by video call. I’m here to coach you through the process. When you gain success here, you’re destined to accomplish much larger financial goals. Call or email Coach JP if you desire help (309) 550-5744 or email to schedule an appointment .