Organizing Financial Records

In this month's issue of our newsletter we are going to talk about organizing financial records.

Here are some Tips on how to get organized, even on a budget

• 01.  Consequences of not organizing financial records
  
• 02.  What you must do to be organized
  
• 03.  How to get organized
  
• 04.  Which documents should I keep?
  
• 05.  Bank account tips
  

1.Consequences of not organizing financial records

A lot of people do not realize how many consequences come with not having their financial records organized. Did you know it could actually cost you money by not being organized?

Reality is, the majority of us do not have the luxury to sit home all day and wonder where to go shopping next. A lot of us have work and children, which leads to a schedule that sometimes you just wish for a moment to sit down and relax. Bills come due and between you running around and taking care of a household, they get stuck underneath that pile that somehow seems to build up on the kitchen counter. Unfortunately the creditors do not care that you were busy or your dog ate the bill. All they want is their money and now there is a late payment. That bill that was not organized and was not paid on time has just cost you more money than it should have.

Speaking of money, if your records are not organized you probably are not aware of what is coming in or going out. Ok, so you figure I am paying my bills and do not seem to bounce any checks, so why should I keep on an eye on my deposits and withdrawals. There are a couple reasons. The most important is to make sure that no one that is not authorized is using your card. You may be the victim of identity theft and not even realize it. One way to always know is to make sure you authorize any money going out. Another reason to watch your account is to make sure you are given your credits. In other words, if you returned something you want to make sure it was credited in the right amount.

Planning a trip any time soon? Do you know where your passport is? How about your birth certificate? You may need these if you are leaving the country. There is nothing more frustrating than not having documents when you absolutely need them. You are unable to answer questions regarding them and you waste so much time looking for them.

2.What you must do to be organized

Please do not assume that your bank is always right. People make mistakes and only you can dispute any mistakes. When you get your bank statements look over them to make sure your money was not put into someone else's account. Make sure any credits or charges are valid and if they are not you usually have 60 days to dispute it.

Also to be organized you must balance your checkbook. Remember to include all checks written even if they have not appeared on your statement yet. If you are like millions of people and just cannot seem to manage money correctly, you may want to try the envelope system. The envelope system is cheap and really can prove to be an easy way to stay organized.

The way it works is simple. Each month take a couple envelopes and label them with all your bills; for example: rent/mortgage, electric, water, groceries, etc. and also label an envelope with savings. When you get paid take the money that you will spend for each bill and put it in the envelope. Any extra money can be put into savings account. The bills that are fixed will always be the same, however for groceries put how much you want to spend. You will notice by only taking that money to the grocery store, you can not over spend and will most likely not spend it all.

3.How to get organized

It is a lot easier and cheaper than you are probably thinking. Do not run out to the store and buy a huge filing system. All you will need is a cardboard box with some folders. Label the folders and keep up with it. Each time you get something, file it. If you wait until you get a huge pile it is much more work. Also try writing the due dates on the envelopes so that you know exactly how long you have.

I would recommend writing the date that you have to mail it out by instead of the due date, so that you give yourself that extra day or two. It is very imperative that you inform someone you trust to know exactly where you're important documents are located. That person should know in case there is an emergency and you are unable to access it.

4.Which documents should I keep?

Everyone is going to have their own personal documents that are important to them but below is a list of general documents that are important.:


• Will
• Utilities bills
• Birth certificates
• Debit cards
• Checking account statements
• Tax returns ( IRS recommends to keep them 7-10 years)
• Investment documents
• Social security cards
• Credit card bills
• Court papers
• Auto loans
• Mortgage papers
• Auto loan documents
• Rental agreements
• Notarized papers and documents
• Passports
• Immigration papers

5.Bank account tips

You should always have two accounts. One should be a checking account and the other a savings. You should keep in your checking account enough money to cover any checks written or bills that need to be paid. Any extra money should be deposited into a savings account. Most checking accounts pay no interest, however a savings account does pay interest. If you are not using the money immediately it benefits you to make money on it.

Never sign a blank check because anyone can fill in any amount and clean out your bank account. I will also recommend not signing a post-dated check. The reason is a lot of times people do not wait until that date to cash it and if the money is not in your account it will cause you some fees with your bank.

Try to reconcile your checkbook every month. It will make it a lot easier than doing it every couple of months. Once you get in the habit of balancing it every month the time it takes you will be shortened and the knowledge is priceless. Good luck on getting organized.

We hope you enjoyed our March newsletter, if you have any suggestions or comments please let us know @ education@ufs-debtmanagement.com

Newsletter 03
Rev.1
March, 2005