Recently I launched an initiative to help you get more financially organized – yay you! I encouraged you to purchase 2-3 physical standing files with at least 12 tabs and 2 In-boxes, even if you plan to scan and save your bills ultimately—this way you’ll stay organized BEFORE the data gets into your computer, in case you need to find something or scanning gets away from you. You can review my advice on financial organization here.
But even if you plan to keep your financial records in hard copy form, you should know by now that I don’t like organization just for organization’s sake. I like EASY. And the first step to making organization easy is LABELING everything so it has a home.
Monthly File Preparation
Now that you have your tools we need to put them to use.
Inboxes: You have two, so label one “Monthly Bills” and label the second one “Statements.” Easy-Peasy.
- Monthly Bills In Box – place this one where ever you do your routine bill paying.
- Statements In Box – place this one where you typically open mail
Wondering what the difference is? I haven’t told you yet, so I would expect that to be a little foggy right now . . . stay with me for a moment while we continue to work on the structure!
Standing Files: Your first standing file’s title is Monthly Bills. You can write that in sharpie directly on the flap, or make a beautiful label to place on the front.
Next, create the January-December labels to affix on each tab for one standing file. You can actually do this twice if you purchased 3 standing files, one will be for 2012 and the other for 2013.
Say What?
The standing file that holds your monthly bills for 2012 will be stored for one year—throughout 2013—because all of those documents are ones that you need to save one year. If you buy 2 standing files, you can just let those bills hang out in their 2012 standing file for one year. Then, at the end of 2013, you’ll gut and shred the contents of your 2012 file and use that for 2014. You see? Each Monthly Bill standing file gets used every other year.
The In-Box Process
Here’s the stuff you’ll be saving into the Monthly Bills in box as you pay or receive each thing:
- Household Bills
- Credit Card Statements
- Mortgage Statements
- Other Liabilities
A good rule of thumb if you get confused is, was this something I acted upon? Did I make a payment or is this a confirmation of an auto payment?
Here’s the stuff you’ll be saving into the Statements in box as you receive each thing:
- Banking Statements
- Insurance Statements (or explanations of benefits)
- Pay Stubs
- Investment Statements
- Retirement Statements
A good rule of thumb if you get confused is, did I do anything to get this, or is it just a snapshot of something that already happened?
Next, we’ll go through the actual monthly document filing process.
ACTIONS THIS WEEK:
- Label in boxes. Label one “Monthly Bills” and label the second one “Statements.”
- Place the “Monthly Bills” inbox near your bill-paying station.
- Place your “Statements” in box near where you open mail.
- Label one standing file “Monthly Bills” however you prefer.
- Create January through December labels to affix on each tab for your “Monthly Bill” standing file.
- Start using the in boxes to separate the two types of documents as you go.
Done!