Plan for Tomorrow | How to organize your personal finances like a pro
A man organizes his personal finances

How to organize your personal finances like a pro

Oct 9, 2023, 3:14:52 PM | Reading Time: 5 minutes

Managing your finances can feel like a real chore, but organizing your income, expenses, investments, and other files can significantly contribute to your success. Plus, with a good system, you can access important documents quickly and ensure your loved ones can find the proper paperwork when necessary. Here are some helpful ways to get — and keep — your finances organized.

List your accountsList your accounts

An excellent place to begin organizing your finances is to start listing out your accounts that have financial value, such as your:

  • Savings account
  • Checking account
  • Credit cards
  • Debt
  • Retirement account
  • IRAs
  • 401k or 403b
  • Mortgage
  • Personal loans
  • Student loans
  • Auto loan
  • Certificates of deposit
  • Investments
  • Brokerage 
  • Life insurance

Once you have your accounts listed, you can begin organizing them by using software or by creating a spreadsheet. As you begin to plug in your information, you can more easily keep track of your money and generate reports that allow you to quickly monitor spending and find any income gaps. By taking inventory of all your accounts, you can build your budget accordingly and stay organized as accounts are added or removed down the road.

Save your documents in a safe placeSave your documents in a safe place

Storing and organizing important financial statements and documents is essential to getting your finances in order. You may receive your bills and financial statements via mail, email, or a combination. For electronic invoices and account information, create folders on your computer and email that allow you to sort each according to the type of bill or organization. Creating an Excel spreadsheet that lists account details, login information, and passwords allows you to keep track of all your accounts in one place. Remember to protect your computer with a password or code to prevent anyone from accessing your information. You’ll also need a place to keep printed bank documents, tax files, investment papers, and estate planning information, such as wills, trusts, living wills, medical directives, and powers of attorney. Creating a system for storing and organizing critical financial statements and documents may take a little time at first, but managing your paperwork is worth the effort to protect it and easily access it whenever you need to.

Keep track of important purchasesKeep track of important purchases

Receipts for major purchases should be saved and stapled to the warranty or instruction manual and then stored in a permanent file. A classification folder with pocket dividers for each type of purchase (electronics, furniture, appliances, etc.) is a good idea to organize them further.

File your investment papersFile your investment papers

Keep any monthly financial statements until you get an annual summary. When you receive the annual summary statement, shred the monthlies and file the summary. If you have a bunch of accounts, make sure to set up one folder per account. Keep any paperwork associated with the accounts as long as you have those investments.

Organize estate planning documentsOrganize estate planning documents

You want to store estate planning documents in a safe and accessible place. Most people think of safe deposit boxes first but remember that many states require a court order for your family members to open the box and locate your documents if they are only under your name. You can keep your estate planning documents at your attorney’s office or in your home or office. Just make sure to store them in a fire and waterproof safe.

Protect your digital documents
Protect your digital documents

Protecting your financial data and information from computer viruses and cybersecurity threats is an important part of organizing your finances.

Safeguard data on your mobiled devicesSafeguard data on your mobile devices

If you have sensitive data on your smartphone, computer, or tablet, you’ll need to be careful to protect that information in public. Public Wi-Fi typically doesn’t offer encryption for individuals using the same hotspot, so your signals are broadcast across the immediate area. This makes it easy for someone to eavesdrop on your communication or for hackers to intercept your signal. The best way to secure sensitive data is not to keep it on your mobile device. If you do, use a virtual private network (VPN) to encrypt your internet traffic.

Secure your passwords Secure your passwords

Storing passwords is a risk, but it’s something to consider to ensure you have access to your accounts and that your loved ones can access them when you pass away. You can use unique password organizer books or a password manager program that generates and maintains strong passwords. Also, remember to update these passwords regularly and not use the same one for multiple accounts.

Back up your digital documents Back up your digital documents

It’s important to avoid emailing copies of financial documents or tax information. Instead, back up digital docs on an external hard drive, password-protect the files, and update that storage periodically. For certain documents, you may also want to make a copy to a second drive and store it in a safe deposit box.

Look over your budget monthlyLook over your budget monthly

Reviewing your budget each month can help you stay on top of your spending and determine how you’re breaking down your income. You may need to make adjustments along the way as your financial situation changes. You can also reduce your fixed expenses, such as your mortgage, rent, and insurance rates, or try to cut down your variable expenses, like your grocery bill, utilities, and transportation costs.

Several budgeting apps can make it easier to see how much you’re spending, track your cash flow, and pinpoint savings opportunities. Many tools are designed for general personal budgeting. Still, each app may offer specific features, such as tracking your bills, a complete money management system, or alerts when you are close to overspending or reaching a financial goal.

Stay on the same page financially Stay on the same page financially

If you have joint accounts with a partner, you’ll want to ensure you’re both on the same page regarding spending, investments, passwords, and the location of important financial documents. This is especially helpful if one of you passes away and your significant other needs to access financial information. Keeping communication lines open can help you both stay on target with your financial goals, build savings for the future, and fix any issues before they lead to more significant financial problems.

With a strong organizational system in place, you can easily manage your money and feel more confident about your financial decisions. Even if you begin with minor changes, those steps can positively impact your overall financial well-being today and in the future.