You can get away with an untidy house…sure you’ll waste some time looking for those car keys. But a lack of organization in your home finances is a recipe for disaster.
Not only is it stressful, but it can also cost you more money in terms of late bills and overdraft fees…(a/k/a money needlessly wasted.)
While it does take a bit of time to organize your home finances, once you’ve set up your plan, managing your finances is a simple task that shouldn’t take more than a few minutes each month. This process will keep your from wasting money.
Let’s get started:
1. Set up your household filing system.
While you can make adjustments as needed, set up filing folders beginning with the following categories.
- ⬥ Medical
- ⬥ Job
- ⬥ Banking
- ⬥ Taxes
- ⬥ Home mortgage/rent
- ⬥ Automobiles
- ⬥ Insurance (home/auto)
- ⬥ Misc. (receipts for major purchases)
- ⬥ Loans
- ⬥ Credit cards
As the mail comes in, file what needs to be kept and place your bills in a separate location. You can also store your household finances in your HomeZada account to keep a digital record of your information.
Items that should be saved include:
- ⬥ Account statements
- ⬥ Pay stubs
- ⬥ Health insurance forms
- ⬥ Medical forms
- ⬥ Anything tax-related such as receipts, 1099 statements, child care, etc.
Schedule a regular date to clean out your files. (e.g. quarterly, annually or semi-annually) To organize your home finances, it is important to throw out or recycle non important documents. But keeping items that need to be kept for longer periods of time such as your tax returns is beneficial.
Don’t get hung up on this step, just make a list of who you need to pay, what date they need to be paid and the amount that needs to be paid.
This will be a reference guide that you turn to each month to ensure that all of your bills are accounted for.
3. Organize your payment system.
Are you constantly paying late fees because you’ve forgotten to pay a bill?
Don’t let your bills get buried under piles of junk mail…deal with them by paying them immediately (if you have the money on hand). Or try the following:
- ⬥ Open each and every bill as it comes in the mail.
- ⬥ Write the due date on the calendar, comparing it to your master list of bills (to make sure you’re not being overcharged).
- ⬥ Make a note as you receive each bill (to make sure nothing is missed)
- ⬥ Separate the payment slip from the statement and place it in the return envelope.
- ⬥ File the statement part of the bill in your account folder.
- ⬥ Write your return address and place a stamp on the return envelope and mail it to your creditor.
If you pay your bills electronically, compare your statement each payday with your master list of bills to help you make any necessary adjustments before problems arise.
4. Keep tabs on your bank balance
You may be doing this already, but if you’re not, it’s important to start building this habit…especially if you share your account with someone else.
Nothing is worse than thinking you have the money in your account to cover a bill, only to find out your significant other forgot to mention they pulled out money last weekend.
5. Pay your bills on time
Set a date with yourself each week to pay your bills well before their due dates to avoid any late fees.
This will be the easiest part of managing your home finances, as you’ve already filed the statement portion of your bills and have prepared the return envelopes.
Now, all you need to do is write a check, slip it into the envelope and put it in the mail.
Don’t put it off…once you begin using your system it will become a habit…making your life easier and saving you the headache and embarrassment of late payments and overdraft fees.