Organizing Finances

Keeping your finances organized is very beneficial. We are not taught how to keep this very important information together. And with everything being electronic and online, I worry that we don’t have a good handle on this asset.

Hopefully the following article will assist you with your financial endeavors. Let’s discuss Insurance, Wills,  Paperwork and a Budget …

insurance

At some point in your life, someone else may become financial dependent on you. It’s very important to decide what it would take for that important person to survive without you. This may include getting Life Insurance, and you may have that benefit through your employer. If not, or if it’s not enough to cover expenses, contact your insurance agent to discuss life insurance.

Don’t invest with an insurance company, just get the coverage in the form of term insurance. The premiums are low and it provides much more death benefit. With other types of insurance, your family looses the investment in the event of your death.

Wills

In the event of your death, it’s very important to have a will. It’s also important to keep it up-to-date as life events change your situation. It’s a very good way to make sure your finances are passed along as you wish.

In order to establish a will, there are many sites online. You can also consult an attorney to provide this service. Make sure your family knows your wishes. Place your will in a safe place, or at least have someone in the family know your attorney, who will retain a copy.

Paperwork

Above is my desk drawer where I keep my paperwork. Most items are electronic these days, but there are still items I file away. In my professional organizing business, I work with clients to control this paper mess. Every day new papers come into the home, this system may help you. It’s designed to perpetually replace items in order to keep it up-to-date and whittled down.

The sections include the following:

  • Taxes — business receipts, mortgage interest, w2’s for the current year. I have the past 7 years completed taxes stored away from the work area.
  • Investments — quarterly statements are replaced with previous one.
  • Monthly — January thru December for the current year. I remove next month’s last year as each month comes up. Any big receipts, bills that I pay, other important stuff for the month gets file in here, but discarded in 12 months.
  • Policies — Car insurance, medical, home, and life insurance policies are kept and the statements are replaced each year.
  • Assets — Warranties and other household papers are in this section for quick reference. Most manuals don’t need to be kept anymore, everything is online.
Budget

Below is an example of a quick and easy budget. By making a list, you can know your numbers. This is very important when making decisions about moving, new cars, changing jobs, and any time you are spending your hard earned income. If you have numbers in front of you, you’re better apt to make a sound decision instead of an emotional one.

The example includes the major categories and a format to gather your numbers, but make it your own. And update it annually. I like to do ours around April when we are finalizing our taxes.  You’re already pulling numbers for income, interest, and deductions such as real estate taxes and contributions, why not pull the rest of it together!

 

Item Monthly Amount
Income 1000.00
Rent/Mortgage 400.00
Car (Payment, Gas, Maintenance) 100.00
Food (Groceries, Restaurants, Coffee) 150.00
Utilities (Phone, Gas, Electric, TV, Internet) 160.00
Insurance (Rent/Home, Life, Car) 40.00
Clothing (Work/Uniforms, Dry Cleaning/Laundry) 25.00
Hobbies/Entertainment 75.00
Contributions/Gifts 50.00
Total Bills 1000.00
Difference Zero