For the past several weeks, I have been providing step by step tips to help people become more financially organized in an area where most people are particularly challenged—maintaining financial documents. First, we gathered the correct tools, and then last time we talked about how to organize them for your success. This week I go deeper into the monthly filing process.
The Monthly Filing Process
Step One: Use the In Boxes Daily As You Pay Bills and Get Mail
In my last post, we discussed how to organize your in boxes, how we learn how to use them to better organize documents. As I pay my bills all month, I throw them into the inbox I have dedicated to holding all of my bills and expenses.
If I get a physical statement from my bank, investments or health insurance (like an explanation of benefits), I throw them into the Statements inbox (sometimes the envelopes don’t even get opened if I know what they are). If I weren’t self employed, I would also be adding my paystubs to the “Statements” inbox.
Confusing? We’ll talk more about the ongoing filing system next time, but for now remember:
- If you’re paying something or retaining documentation of an expense, it goes into the Monthly file.
- If you’re receiving info that you don’t need to act upon, it will go into the Ongoing file.
Step Two: Once Every Month Or So, Spend ~15-30 Minutes Filing
- Find a show you like on TV.
- Get your Monthly Bills standing file and your “Monthly Bill” in box.
- Transfer your bills to the appropriate month in the standing file.
Okay, truth time: This only happens every couple of months for me! So I am separating bills into the right month, so it actually takes me 15 minutes or so. I also review the bills, throw out old receipts and ATM slips and generally use the time to reflect on expenses over the past months. If you do this every month, it should take 30 seconds.
Paperless Option: Instead of sitting in front of the TV, you’ll be scanning bills into the computer–or downloading them and saving them as PDFs if you are paying a bill online. Just create a folder titled “Monthly Bills 2012.” You don’t have to create subfolders for each month, simply add the month to the file name! For example, I would scan and save my cable bill as Comcast_2012_07 so that I have the vendor name and the month (and year). This way the electronic files list the bills alphabetically by vendor and then chronologically by month—but you don’t need to be this anal retentive, just get them in there!
Frequently Asked Questions About The Monthly Filing Process
Q: Why am I saving these bills by month?
A: In case there is a mistake with one of your accounts, you have the back-up to audit it. You file them by month because the likelihood is pretty low you’ll need to refer back to them.
Q: What about receipts from purchases?
A: Sales receipts of misc. items – save these in your in box until they clear and/or you’re sure you won’t return the item, and then you can destroy them during your monthly filing process transfer. Typically one month suffices.
Exception: If the sales receipt is for a big ticket item or has to do with home improvement or your own business, you’ll want to save it in the Statements in box for now. You may need it for tax purposes.
Q: What about ATM slips?
Save ATM receipts until they clear your bank, then you can destroy them.
ACTIONS THIS WEEK:
- Set 30 minutes in your calendar every month to transfer “Monthly Bills” from the in box to the standing file or your electronic equivalent. This might be your scanning time and statement downloading time if you choose to go paperless.
- Register for paperless delivery of any bill you currently receive via snail mail, if you’re serious about going paperless!
- If you’re going paperless, consider investing $40-$50 for a cross-cut shredder, so you can destroy your paper bills before recycling them.
NEXT TIME: The ongoing filing process to keep things organized.