Getting organized

Develop a home filing system to help keep your finances in order.

Where is the …. car title … account number … the receipt for the car repair … ? Ever spent hours looking for an important document? You can eliminate a great deal of stress and save yourself time by use a simple but carefully thought-out filing system.

Knowing where your documents are can help you to save time and money during a crisis too. Set up a home office that is devoted to important papers. Organize your records in a simple manner that your family can easily understand. Some may choose to use an electronic filing system. If that’s the case, be sure to back up the files into an external drive or a USB flash drive. Keep the back up copy in a safe location or you could try an online data back service.

To start, select a place in your home as the office center. It could be in the kitchen, family room, bedroom, or anywhere that is convenient. You should have room for a table or desk for paying bills, setting up a computer and be well lit.

Consider having the following items in your office: calculator, shelves, computer, pencils, paper clips, staples and tape.

Keep the area designated as the place for items that are related to your bills and other important records. Do not use it as a dumping area for anything that needs a place to rest. Piles of papers that collect tend to overwhelm and discourage any attempt to organize. Begin to simplify by going through the papers and deciding whether or not they are necessary. Keep all records that might be used for proof of ownership, resale purposes, or income tax.

The decisions to throw out papers can be difficult. The following information should help make the task easier. To keep your files up-to-date, go through them annually. Throw away:

  • Bank statements and receipts for closed accounts
  • Bill receipts that have been recorded or payments acknowledged
  • Sales receipts that have been recorded
  • Records of appliances that have been replaced
  • Warranties that have expired.

You then need to develop a filing system. Categorize your files into terms that make sense to you: insurance information, tax information, ownership papers, bank statements, credit card statements, receipts, etc. are all examples. You might choose to have two types of file: Temporary (for things you will refer to during the year) and permanent (Records you need to keep but seldom use such as ownership papers).

Remember to keep and update annually a household inventory. The inventory is important for insurance purposes, proof of ownership and estate distribution. Use a video camera to record each room and all valuables. Be sure to store the video outside your home in a safe place.

Designate a time to spend on paying bills and filing at least once a month. If one person in the household usually pays the bills, it is important for other adults in the household to at least be familiar with the filing system and know where things are kept.

Take the time now to organize your personal finances at home; you will be glad you did. For more information about organization and other news about financial health, check out the MiMoney health website from Michigan State University Extension.

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