Step 66: Organize your Paperwork

We’ve already mentioned this quickly when talking about warranties, but one of the worst things is to have your finances all in order and then not being able to find important financial documents when you need them, such as insurance policies, warranties or bank statements or income stubs for your tax return. Come to think of it, is it even possible to become financially organized without having your home administration organized? Hmmm maybe not.

Having a proper, up-to-date and easy to understand filing system, doesn’t just guarantee less stress and time lost when you are looking for things. It also ensures you don’t waste money on a new product if your old one still had a guarantee on it, allows you to quickly check you still have the right insurance, stops you forgetting to pay outstanding bills and makes is easy to check your credit card statements are all correct.

In this step you are going to set up a home administration to make sure you’ll never end up in a situation where you can’t find your important financial statements. 

Step 66 – Organize your Papers – in detail:

• Make sure you have enough folders or a filing cabinet available.
• Grab a big box or basket and put in any papers you can find lying around your house that should be sorted and / or filed.
• Divide the documents by topic: all car papers together, all electricity bills together etc.
• Find any pre-historic attempts of a filing system if you have tried to set one up before and be prepared to slightly overhaul this if it is relatively outdated.
• Assign each folder to a specific category or use dividers to create more space within each folder. Depending on how many papers you have for each topic, some might need more or less space and some categories might even require an entire folder.
• You’ll probably have documents and papers for the following categories:
  • Income / payslips and annual statements
  • Insurance policies
  • Bank and credit card statements
  • Savings and pensions
  • Car documents
  • Utilities contracts and bills (electricity, water, phone etc).
  • Tax returns
  • Warranties, manuals and receipts
  • House and home maintenance related issues
  • Official paperwork such as birth certificates, marriage licence and diplomas
  • School documents
  • Mortgage documents
  • Medical documents
  • Pets-related documents
• Set up a command centre / mail station or organization station (ideally close to your mail box or entrance) where you have the following five baskets or boxes available for any paperwork:
  • To Pay – for any bills that need to be paid (hmmm you should really be automating these remember?)
  • To do – any action to be taken items
  • To Read
  • To File – for any paperwork that has been processed that you need to keep and that can be filed.
  • Recycling bin – for any papers that can be recycled immediately
• Make it a daily habit to open any paperwork you receive and to put these in the appropriate baskets. The same is true for any documents you bring home, such as warranties or receipts if you’ve purchased anything that day.
• Find a weekly time to go through your baskets and process, pay, read and/ or file the contents. – Add this time to your calendar!
• Make it a habit to think with every paper that you receive whether you really need to keep the document and / or whether you can do anything to make the paperwork unnecessary: automate bills and payments, opt out of paper bank statements if you have online banking.
• Once you have a decent filing system set up that is clear and easy to use (don’t make it overly complicated!) you can be sure that all your paperwork is always where it should be: in the corresponding folders (or in the basket if you haven’t yet processed it), meaning you should never be without important documents and financial statements when you need them.

Of course this might all sound incredibly old-fashioned, time-consuming or space consuming to you.. If that is the case, stay tuned for the next step in which we look at how to convert to a digital filing system instead if that is more suitable to your needs.

Read more about my 100 steps mission to financial independence or simply decide to take control today and join us on our step-by-step quest on how to make your finances work for you, starting with step 1.