Marc Serafino
We’ve all been there, not knowing where our money goes. It’s like it’s disappearing from our account(s).
All of us forget things. Some us, however, are aware of that and have developed a system to keep the money under control.
Good news is that these days you don’t have to remember a lot — the technology and good filing system are there to kick in when needed.
We have scattered the internet to find the advice that will work for just about anyone. These are the main principles and you should build from there to find the system that works for you.
1. Use an app to track everything
There is no need to rely on your memory to track your money — as they say it, there’s an app for that.
There are actually a number of apps that will let you save, spend and manage your finances across a number of different accounts. If you have all of your money in a single bank, then that bank’s app is all you need. If you, however, use services of multiple financial institutions, you will need more apps, or something more comprehensive like the Mint app.
The point of using an app is to remember less, and have more time for other things.
A good app will provide you with a way to track all of your account statements, recurring expenses, occasional spending and more.
If you can, you may also want to scan all of the receipts — or at least some of them — and put them in some smart note taking service like Evernote.
2. Organize your bills
Another important thing to do is to organize your bills. A good mobile app could help you with this, as well. You will, however, want to put all of your regular, monthly expenses on paper and see what can be automated and what needs your attention every month. While you’re at it, you can also see whether there’s room for some savings — check out this article for help to help you cut on your monthly expenses.
You may also have to keep copies of some papers. Use a filing container for all of the different paper receipts and organize them by categories — i.e. bank statements, taxes, medical expenses, and so on.
Actually, it is best to use multiple (at least two) filing containers — they are not expensive after all — to differentiate between paper statements that you need to keep for longer period of time, and those that can be canned after just a few months.
The first category of paper statements include tax returns and tax return documentation, various contracts, real estate records, last pay stub of a job, last pay stub of the year, mortgage payment checks, various loan payments, canceled checks, bank deposit slips, bank statements, investment records and similarly important paper trails. Other stuff could go to the second filer.
Also, you may want to scan all of these papers and store them in some cloud-based service like Evernote, GDrive or OneDrive to have them easily accessible when needed.
3. Automate as much as you can
There is no need to manually pay for services that need to be paid every month. You will need drinking water, electricity and internet — so automate those payments. In fact, companies offering these services will encourage you to do that, so follow their lead. However, don’t do this with all of your monthly expenses before figuring out whether there’s room for savings.
Beyond expenses, you should also automate your investments. Time goes by fast so you better have some money put on the side for your retirement. Making automatic deposits will take you a long way.
On the other hand, there are a few things you should NOT automate. One of them is Automated Clearing House (ACH) debit which allows the company to deduct money from your checking or savings account every month. Using your credit card is much safer for recurring payments.
4. Set reminders
For the things you can’t or don’t want to automate, set reminders. Let your phone and calendar alert you that it’s time to make a payment. Or that something else needs to be done.
Reminders are cool for irregular payments that come every second month or two times per year, and especially for the dates when your bills are due.
In addition, your calendar can remind you about other important dates, like the tax filing day or some other day when you need to make a payment, or otherwise move money from one account to the other.
5. Make weekly summaries
It is a good practice to put some time aside every week to go over everything that’s happening in your financial life. A single hour or even 30 minutes per week could take you a long way.
You’ll want to use that time to go through your expenses, progress toward goals, investments, and other financial information. This is also a great opportunity to reevaluate your budget and see how good you are in sticking to it.
Yes this can be done once a month, but then it will take much more time, hence you’ll want to avoid doing it. It is much easier to go through bank statements on a weekly, rather than monthly, basis. You will have easier time remembering when you made some payment with your credit card.
This could be something you do on Saturday or Sunday. Again, it takes 30-60 minutes — or even less once you get used to — and will pay big dividends in the long run.
Conclusion
The lack of organization can cost real money. Modern tools make it easier to organize your financial life and prosper. Explore a bit and find the system that works for you. Personally, I rely on Mint, my primary bank’s mobile app, Evernote (to store all papers) and Google Calendar. What tools do you use?
