Plan For Tomorrow | How to organize your personal finances like a pro
A young woman organizes her files.

How to organize your personal finances like a pro

Thursday 30 July 2020 | Reading Time: 5 minutes

Managing your finances can be a real chore, but organizing your income, expenses, investments, and other financial files can significantly contribute to your financial success, allow you to access important documents and ensure that your loved ones can find the right paperwork when you’re gone. Here are some ways to get your finances organized and keep them that way.

Make a list of your accounts

Start by listing out your financial accounts. Note any accounts that have financial value, such as your:

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

Once you have your accounts listed, get them organized by creating a spreadsheet or using software. The software can help you see your financial life all in one place by keeping track of your accounts and automatically updating them. It also offers you the ability to generate reports that can help you monitor your money easier.

Save your documents in a safe place

You’ll need a place to keep bills that come by mail, investment papers, major purchases, bank documents, and tax files, as well as estate planning documents such as wills, trusts, living wills, medical directives, and powers of attorney. Storing and organizing important financial statements and documents can be a chore, but ordering your paperwork is worth the effort so you can access it easily and protect it.

Set up a filing system

Organize regular bills and financial statements by the month or by the account (your preference). A file cabinet with hanging files is a good investment. Be sure to arrange documents by account in chronological order within each file, so they are easier to find at a later date. 

Organize 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 hanging folder per account. Keep any paperwork associated with the accounts as long as you have those investments.

Store 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 keep in mind that many states require a court order for your family members to open up the box and locate your documents if they are only under your name. It’s perfectly fine to keep your estate planning documents in your home or office, but make sure to store them in a fire and water-proof safe so they aren’t destroyed in a fire or flood. You can also store estate planning documents at your attorney’s office.

File receipts for important purchases

Receipts for major purchases should be saved and stapled to the warranty or instruction manual, 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.

Protect your digital documents

It’s a good idea to make sure your electronic financial documents are secure against the latest computer viruses and malware.

Secure data on your mobile devices

If you have sensitive data on your computer, tablet, or smartphone you need to be careful when you’re 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 to not keep it on your mobile device. If you do, use a virtual private network (VPN) which will encrypt your internet traffic.

Save passwords securely

Storing passwords is a risk, but it’s something to consider to ensure you have access to your accounts, and your loved ones can access them when you pass away. You can use special password organizer books or a password manager program that generates and maintain strong passwords.

Back up your digital documents

Emailing copies of your documents can put you at risk, so instead back up digital docs on an external hard drive and password protect the files. Be sure to update that storage periodically. You may also want to make a copy to a second drive and store it in a safe deposit box.

Look over your budget monthly

It’s important to stay on top of your income and spending by looking over your budget monthly. You may need to make adjustments along the way as your financial situation changes. You can also work on reducing your fixed expenses, such as your mortgage, rent, and insurance rates, or try and cut down your variable expenses, such as your grocery bill, utilities, and transportation costs. 

Stay on the Same Page with Your Spouse

If you share accounts with a significant other, be sure to keep each other in the loop about spending, investments, important paperwork, and other important financial documents and events. Your finances can quickly become disorganized if you aren’t aware of everything that’s happening with them.  

REV 2/2020