How to Organize Your Finances Like an Adult

One of the biggest challenges facing anyone who’s reached adulthood is managing finances. That’s because the effort cuts across specialties. A good financial manager is part secretary, part mathematician, part accountant, part forecaster, and part stress manager.

It all seems a bit overwhelming for those of us who want to have a life.

However, managing your finances doesn’t have to be a frustrating, hair-pulling, see-you-at-the-ABC-store ordeal. With a little advanced planning, some of the right equipment, and a bit of scheduling, you can get a grip on your finances even without a degree in accounting.

Here are some tips to organizing your finances like an adult.

Pick up a Filing Cabinet

A filing cabinet is indispensable if you want to manage your personal finances. Although this is the 21st century and much of what we do is online, we still live in a paper-driven world. Just get involved in some legal issues and you’ll learn about that very quickly.

A filing cabinet will help you organize your financial documents so that you can refer to them from time to time. For example, sometimes you might need to grab a credit card statement to double-check how much you were charged. On another occasion, you might want to check to see how much you paid for a contracting service in the past so that you can make sure that you don’t get overcharged for a similar service in the future.

Of course, a filing cabinet is all but useless without manila folders. Make sure that you grab plenty of those and label them accurately. Feel free to make copies of your financial documents and keep them in more than one file if they can be filed under multiple categories. For example, a credit card statement might be filed under the name of the credit card company as well as a generic “Credit Card Statements” file.

Redundancy is good in engineering and finance.

Keep Electronic Copies

Yes, our environmentally hateful world still thrives on paper. However, you can also keep electronic copies of your financial records as well. There are a couple of ways to go about doing this.

One way you can keep digital records is to scan your paper statements and save them as PDF files. Since hard drive space is cheap these days, you can store multiple months of many statements on one drive.

Of course, you’re going to want your hard drive backed up because Murphy’s Law applies to technology more than it applies anywhere else. Grab yourself a Dropbox account or some other online backup service (Google Drive is another option that has the benefit of being free) so that you have backups of your important financial documents in the event that your hard drive crashes.

The other option you have to keep electronic records is to contact the companies that send you bills every month and discuss the possibility of electronic statements as opposed to paper statements. That’s a lot easier than making digital records yourself, and the companies will be responsible for the backups.

Set Up Auto-Pay

Why spend time poring over bills and writing checks when information systems exist to do that for you? Instead of taking time out of your schedule to pay bills, put those payments on auto-pay and go play golf while your bills are handled for you with the aid of modern technology.

Most companies will let you set up a system that automatically pays your bills on a monthly basis. In the event that you can’t set something up with your company, you can almost certainly set it up with your bank. However, setting it up with your bank works best if the bill is a fixed amount every month (a mortgage, for example) and not a variable amount (such as an electric bill).

Consolidate and Lessen Your Workload

The more paperwork you have to manage, the more overwhelming it all becomes. That’s why it’s best to limit your accounts to what is absolutely necessary.

If you’re managing multiple credit cards, for example, see if you can consolidate those credit accounts into one master account for easier management. If you have multiple checking accounts, and you really don’t need that many, combine those accounts into one and make your life a little bit easier.

Use Apps

There is an app for everything, including managing your finances. In fact, there are several appsthat will help you manage your finances.

One of those apps, Mint, is an excellent option if you’re serious about managing your money. You can connect it with your primary checking account and it will track your spending, categorize your expenses, and alert you if you’re approaching a budget limit. Mint will even offer advice about savings tips.

Take the Time to Do It

Finally, be sure to carve out a little bit of time from your busy schedule to file your paperwork, balance your checking account, and review your records for inconsistencies. All of the advice dispensed above won’t matter if you don’t put it into action.

You’ve worked hard for your money. Now, manage it like an adult and enjoy the wealth that you create.

 

This article comes from our friends at Phroogal. It was originally published on November 18, 2015, and can be found on their website here.