6 Simple Steps To Get Financially Organized
Estimated reading time: 10 minutes
Congratulations on taking the first step towards financial organization! Whether you’ve decided to kickstart this journey at the beginning of a new year, a fresh quarter, a significant milestone, or even on a typical Tuesday, the commitment to alleviating the stress of managing your finances is impressive. As we delve into the process of mastering the “6 Simple Steps to Get Financially Organized,” get ready to equip yourself with the tools and strategies to navigate your financial landscape with confidence and clarity.
Table of Contents
- 6 Simple Steps to Get Financially Organized
- Get Your Finances in Line: Steps to Financial Organization
- Get Organized: Step 1 – Tackling the Essential Documents
- Automate Cash Flow: Step 2 – Streamline Inbound and Outbound Payments
- Embrace the Future: Step 3 – Say Goodbye to Paper
- Organize Your Essentials: Step 4 – Cataloging Permanent Records and Information
- Plan Your Legacy: Step 5 – Create Your Estate Plan
- Future-Proofing: Step 6 – Planning Ahead
- Making Cents Count Financial Organizer
- Burhoe Insurance Solutions: Customized Coverage, Tailored for You
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6 Simple Steps to Get Financially Organized
Picture this scenario: You sit down to evaluate your financial situation, gearing up to conquer the world. But as you’re surrounded by a mountain of financial paperwork and faced with a barrage of online statements, stress begins to creep in. Sorting through the paperwork transforms stress into panic, leading to financial overwhelm. The feeling of defeat sets in before you even begin. Does this sound familiar?
Believe me when I say, we’ve all faced this challenge. Financial organization can seem overwhelming, even for those confident in their financial skills. But what about those who admit they lack financial know-how? Let’s be honest, some of us feel completely lost. The idea of getting financially organized can be truly intimidating.
Get Your Finances in Line: Steps to Financial Organization
The best steps to any financial goal, big or small, is to start assessing your to-do list. Establish tasks to mark off upon completing each phase. In essence, the optimal approach is to proceed step by step. Recall the words of Creighton Abrams: “When eating an elephant, take one bite at a time.” Beginning is often the most challenging aspect. Having made the choice to begin, it’s now time to initiate. Let’s dissect the process into six straightforward steps to achieve comprehensive financial organization!
Get Organized: Step 1 – Tackling the Essential Documents
One quick note as you begin, I highly recommend creating a budget snapshot. A budget snapshot is a simple overview of money in, versus money out. By having something in place, no matter how simplistic, it will help to inform your process.
Explore our resource library where you can access a Monthly Budget Workbook to kickstart your financial journey. This comprehensive tool reveals precisely how and where your money is spent. If you prefer creating your monthly budget using a financial spreadsheet in Excel, our Monthly Budget Workbook Template is available for purchase.
Now that you’re prepared to begin organizing your finances, your initial step is to tackle your essential documents. Your objective is to set up a binder, accordion file, or another filing system to store your bills and paper statements. This system is where you’ll maintain your legal documents, tax information, and other vital records.
Organizing Your Financial Documents
If your documents are decades old, these papers may be the only authentic record that exists! As some documents must be kept in hard copy, secure storage is quite crucial. Just picture losing the sole irreplaceable record – a situation you definitely want to avoid, right?
You might want to think about storing your crucial documents in a fire-safe box or fireproof safe. This can be in your home or at another secure location. If your home isn’t suitable, you could opt for a trusted relative’s home. Alternatively, consider a safety deposit box at a reputable financial institution.
Organize your other important, though less critical documents—such as bills and paper statements—in your binder, accordion file, or chosen filing system.
Automate Cash Flow: Step 2 – Streamline Inbound and Outbound Payments
This step may seem simple, yet it’s crucial. With money circulating and checks to deposit, it’s easy to lose track. Nowadays, visiting a bank is uncommon for most of us. However, if you’re holding onto money, the temptation to cash it out and spend it is understandable.
Automate whenever you can (including bill payments). Automation will significantly simplify your life and reduce stress. Your bills will be paid on time, saving you hours of organizing and sifting through paperwork.
Streamline Your Finances: The Power of Automation
Enroll in direct deposit for all income sources, such as your employer, side gigs, Social Security, and tax refunds. For side businesses, request clients to use direct deposit, wire transfer (EFT), or electronic platforms like PayPal or Venmo for payments, ensuring seamless bank transfers.
Direct deposit not only saves you time, but also ensures you get paid faster and securely. By leveraging automation to the fullest extent possible, you can steer clear of fees, hassle, and stress.
Embrace the Future: Step 3 – Say Goodbye to Paper
Your task for this step is to transition to a paperless approach. Opt for online account registrations whenever feasible to minimize paper usage and clutter.
I used to be a die-hard paper enthusiast, saving every single receipt – a bit of a control enthusiast, you might say.
Fortunately, I eventually recognized the benefits of transitioning to a paperless system, which helped me overcome the initial challenges. Once going paperless becomes your standard practice, you’ll likely question why you didn’t make the switch sooner. I certainly did!
Get Organized: Essential Paperwork and Tax Returns
Just so you know, I retain only the most recent 7 years of my current files (important paperwork only). And, only 10-years of my most recent tax returns.
If you need an extra push, consider automating where you can by going paperless, just like in Step 2. It reduces paper and clutter significantly. Importantly, it greatly reduces the risk of your paperwork falling into the wrong hands. Also, it simplifies the process when you’re ready to get your finances in order.
Organize Your Essentials: Step 4 – Cataloging Permanent Records and Information
In this step, you will organize your accounts and essential documents to assist you in managing your legal papers, tax details, and any other vital records effectively.
It is crucial to store these documents in a secure location, as previously mentioned in Step 1. You will also need to maintain a record of the stored items, whether they are located in your residence, a trusted relative’s place, or within a financial institution. It is imperative to have clear knowledge of the content of those documents.
Organizing Your Financial Information
Since this information is only for your private use, not for public consumption, consider including a list of your account numbers, detailed descriptions, passwords, and PINs. In doing so, in the event you want to make any changes in the future, it will only ease the process for you.
Please store this catalog in a secure and discreet location. If you or your loved ones require this information, it is easily accessible. Otherwise, ensure it remains safeguarded.
Plan Your Legacy: Step 5 – Create Your Estate Plan
If your estate planning needs have been set up, that’s fantastic! You’re ahead of the game. Just remember to keep those documents current. If you haven’t reached this stage yet, consider meeting with an attorney to create a will or trust.
I cannot emphasize enough how crucial estate planning, wills, and trusts are. Setting up a will is a must for everyone. You might think your belongings aren’t significant enough to warrant a will, but the extent of your possessions doesn’t diminish its importance. Reach out, and a trustworthy attorney will guide you through your unique circumstances.
Failing to create a will can leave your loved ones in a challenging position. By not formally documenting your wishes, your beneficiaries may encounter additional stress during an already difficult time. It’s essential to consider this aspect to ensure your final wishes are clear and respected.
Once again, if you already have a will or trust, kudos to you! Remember, estate planning is an ongoing process, not a one-and-done task. Be sure to update your documents when life events occur, your wishes evolve, or laws change.
Estate Planning Essentials: Your Guide to Getting Organized
Additional items to check-off your estate planning list are getting your individual life insurance policies, retirement accounts, and your investments updated as well. The optimal time to review and finalize this task is during your employer’s annual enrollment period. This occurs annually, typically in the final quarter, to prepare for the upcoming New Year.
While you review your beneficiary designations for your company’s group life insurance and employer-sponsored retirement plans, consider managing your personal accounts too. If you’re unsure about your employer’s annual enrollment dates, reach out to your Plan Administrator.
Future-Proofing: Step 6 – Planning Ahead
Regardless of your age, it’s important to get your finances organized and ready for the future. While planning may not be everyone’s favorite task, it’s crucial for your well-being and that of your loved ones. If you haven’t already, consider appointing a power of attorney, establishing a living will and a health care directive to help manage your affairs.
In the realm of end-of-life planning, it’s crucial to keep your beneficiaries informed. Provide clear instructions and jot down the contact details of your attorney, accountant, and trusted advisor. Share this information with your beneficiaries through a handwritten note, email, or carrier pigeon—just ensure they receive it.
Information to Share with Your Loved Ones
Share the combination to your fire-safe box (or fireproof safe) or grant access to your safety deposit box with your most trusted loved ones or advisor. Inform them about the location of your financial documents and necessary access details in case of any emergencies. This thoughtful act will bring peace of mind to both you and your loved ones.
If you’ve made the decision to enhance your financial organization, following these six straightforward steps will assist you in gaining control of your overall financial situation. Remember, you don’t have to tackle everything at once, but by addressing these six tasks, you’ll make substantial progress.
6 Simple Steps to Get Financially Organized Checklist
To help you stay on top of the process, I’ve created a “6 Simple Steps to Get Financially Organized” checklist. This list is available in our FREE Resource Library. Explore invaluable insights on investing, personal finance, life insurance, and retirement planning.
When It’s Time to Get Financially Organized
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- Guidance to track your legal documents, tax information, and permanent records
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- Templates, checklists, and step-by-step actions
- Insights on the financial-must haves to build a secure future
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