- "Review your current system. If you pile your bills on a desk and aren’t sure which have been paid and which are still pending, or if you have trouble locating receipts or invoices, it’s time to make a change.
Start with these basic steps:
- Save all credit card receipts in one place. A box or file folder is a great place to store this month’s credit card receipts and will give you quick access to compare them to your statement when it arrives. You should keep all receipts at least until you have verified that the charges are correct on your bill. Create a "Receipts to Keep" folder for those receipts for items that may need to be returned or that have a warranty or service plan in effect.
- Organize your bill paying. Set up a regular time and place to pay bills each month. A good rule of thumb is to coordinate it with you pay schedule. If you are paid on the 15th and 30th, make plans to pay bills at those same times each month. If it makes it easier, you can log your due dates on a calendar. As bills arrive, organize them into "To be Paid" folders and when you pay them, document payment on the statement and file under "Paid."Paying bills online can be a great timesaver. Whether you use your own financial institution or pay through the vendor’s website, you can often schedule the payments to occur on the day of your choosing. Be sure to jot down the confirmation number as proof of payment.
- Pay off credit cards. Make a log with each of your credit card and credit accounts, and list the outstanding balance for each. Set up a schedule to pay off the ones with the highest interest rates first. When that one is paid off, apply that money to the next card until all balances are paid. Avoid using credit cards to charge more than you can reasonably pay off at the end of the month.
- Balance your checking account. At least twice a month, reconcile your bank statement to the bank’s records. This can be done in just a few minutes online, checking off what has cleared your account and making sure you have accounted for any debit card purchases or ATM transactions.
- Review your insurance policies. January is an excellent time to review all insurance policies to make sure you’re covered properly. Review your life insurance policy to ensure it provides adequate coverage for your family. You can save money by raising your deductibles on auto and homeowners, or renters, insurance. Every few years, shop rates, comparing policies point for point.
- Tax organization. While you’re pulling together information to file last year’s taxes, note which categories have the most activity. Make specific folders for such things as out-of-pocket medical and drug costs, work-related expenses like travel/mileage if not reimbursed, educational costs, etc. Designate one location for all tax information and keep up with filing regularly. Next year, the tax-preparation process will be much easier because all the records and receipts have been kept together.
- Shredding – purge old files and shred the contents to protect yourself from identity theft. Keep a shredder near your desk and deal with incoming mail immediately. While you should check with your accountant about how long financial records should be retained, a good rule of thumb is to keep tax records and credit card statements for seven years. Keep pay stubs until you get your year-end tax forms, and keep key banking information permanently.
- Check your Credit Report. Consumers can request a free copy of their credit report from each of the three bureaus each year. Set up a regular schedule to get reports from www.annualcreditreport.com . A good rule of thumb is to get the report from one bureau in January, another in May, and the third in September. Notify the bureaus immediately if you find any errors or unusual activity, such as accounts you did not open."
source: Consumer Credit Counseling Service CCCS