How I Organize Financial Documents
Organization is not my strong point, but I make an exception for my finances. I have had a few different systems: binders, bill boxes, etc, but luckily I found the “bill in a box” system early in my financial independence years and it has stuck. I found the system while reading Make Money, Not Excuses: Wake Up, Take Charge, and Overcome Your Financial Fears Forever by Jean Chatzky, but she also details it here on her website. My bill box looks something like this:
I have a green hanging folder for each category, and a file folder for each sub-category. For example, my “Car” file has Maintenance, Insurance, and Loan. My “School” file has Loans, Financial Aid, and Professional (for licensing applications, PRAXIS scores, etc). Get the idea?
You can adapt your bill box to fit your needs. At this time in my life I do not own that many valuables so I just have one green hanging folder for receipts. Eventually I will organize my big-ticket receipts into categories like antiques and appliances.
When a bill comes in the mail I pay it immediately. Jean recommends a “To-Pay” file but I do not trust myself to remember. I write a note to myself on the bill like “Paid in full, 9/10/10, check via Bank Iowa” or “Paid in full, 9/10/10, online via American Trust.” Then I file it away in my little box.
Another great way to organize your finance-related papers is to have less of them. Opt for online statements whenever possible. I am very excited for the Reward checking that my bank offers. In exchange for using my debit card instead of written checks at least 12 times in a month and opting for e-statements I get 3% interest! That is more than I can make on a CD right now. I am sure that my bank saves that much money on paper and mailing costs.
Now that I weeded out my bill box I have a lot of white paper to dispose of. I could always recycle them, but here are some other great ideas…
The Frugal Girl shreds her bills and puts them in her compost to increase her “browns.”
Quiltville uses 8.5″x11″ sheets of paper to piece her spider-web quilts. She has a great printable tutorial here. A spiderweb quilt is a great way to use up tiny strips of fabric.
What do you do with your financial documents?