Financial
clutter may happen once a person
spends a significant amount of money on things they do not necessarily need.
The need to organize your budget occurs when you have a pile of unopened statements
and bills. This process does not have to be daunting; by following the steps provided
below, you will realize that this is relatively simple.
Step-By-Step Guide when Organizing Your Financial Clutter
In this article, we will help you sort out
your financial clutter. Hopefully,
we can guide you towards having total control of your finances.
1. Gather and Organize Your Financial
Files
Look at every corner of your house and
gather all the financial files that
have been bothering you and place it all on your desk. Start opening the
unopened statements. If you stumbled upon a statement that needs to be
addressed urgently, put it on the pile that is 'time-sensitive.' You will have
to address this in a matter of 2 days. You should organize your financial clutter into four piles:
·
Time Sensitive-
Current and overdue bills that need to be addressed immediately.
·
Monthly Statement-
This may include pay stubs, retirement, and bank statements.
·
Past Bills- Includes
mortgage, phone, utilities, and credit card.
·
Permanent
Document- Insurance policy, birth certificate, marriage license, and wills
should be added here.
For those receiving electronic billing
statements, the best way to organize your financial
files is by separating the files into different folders. You may also use
the category mentioned above when naming the folders.
2. Dispose of Obsolete Items
After organizing your financial files, it is time for you to shred the old documents. Removing
a significant amount of documents will feel liberating. Do not simply delete it;
start shredding your outdated electronic billing statement. Here is a short
guide to understanding what you need to keep.
·
The insurance
policies and paid medical bills need to be kept for at least three years.
·
ITR (Income Tax
Return) needs to be stored for three years.
·
Hold on to your
investment statement for a year.
·
Bank statements
and credit card statements used for tax purposes need to be kept for three
years.
3. Storing Your Financial Files
Finding a location for your financial
statement is like organizing your home. The items you need to use frequently
will have to be stored in places you can easily access. The time-sensitive
finances should be placed on your desk. Organizing
the financial files on your computer
would make it easier for you to be on top of your financial obligations.
4. Keep the Phase
Now that you completed the organization of your financial clutter make it a habit to
allot a time of your day to maintain your financial state free from any
confusion. You may think that this process is time-consuming but consider how
many times you spend on the things that are not as important for your future and
financial standing.
Finally, make sure to consider using the
software and programs that will help you organize your financial files. Budgeting, bill-paying, and online banking
software will help you address your organization's task with just a click of
the right button. Learning to organize your financial clutter will allow you to better control your future and
assets. Start addressing your finances by following the steps we provided
above.
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