Me and My Money

Financial Disorganization

Posted November 25, 2011
Originally Published August 8, 2011

What’s the biggest impediment to financial stability? Bad spending habits? A love affair with plastic? Family troubles? Job loss? Too much month at the end of your money?

None of the above – it’s disorganization. We tend to blame financial woes on a host of factors that often seem too monumental to tackle, as if they are addictions or circumstances beyond our control. So we do nothing.

However in many, perhaps most, cases the cause of financial problems is right under our noses, in drawers, boxes, files, envelopes and lodged in a host of bookmarks on our computer. In other words, a great, big, fat money mess getting in the way of your financial stability.

“People have a fear of money,” observes Colette Robicheau an organizing consultant and coach with Organize Anything in Halifax. “The big issue is that they really don’t have a grasp of their (financial) situation.”

That lack of grasp, says Robicheau, often results in a paper pile up from unopened or un-read mail and what she calls a digital disconnect. “A lot of my clients say they can’t handle the paper but if you’re not organized on paper you won’t be digitally.”

It’s really easy to pay bills on-line or set up automatic payments but equally easy to lose track of whether or not they’ve been paid or paid properly.

“I’m a tree saver like the next gal but there’s nothing like a piece of paper with paid marked on it,” Robicheau emphasizes.

That old-school approach -- paper, files, sticky labels – is a great place to start if your financial life is in shambles.

Since the dog days of summer are upon us and since you’ve no doubt already completed a host of other organizational chores – basement, garage, storage locker, cupboards, and refrigerator -- tidying your money closet is the perfect task to take on before the busy fall days arrive.

Here is a 30-minute financial clean up to get you started.

Minute 1

Gird loins, close eyes, breath deeply and channel your inner organizer.

Minutes 2 to 5

Think of this next step as a warm-up. Locate all tax returns 2004 and older (you are only required to save six years worth of returns and related receipts) and set in a box for later shredding.

Minutes 6 to 8

Get three brightly coloured file folders and mark them: To Read, To File, To Pay

TIP: Colour does have an impact on how you approach tasks. Pick what motivates you or is likely to make you pay attention (it’s purple or turquoise for me.)

Minutes 9 to 11

Get three more file folders and mark them:
Receipts – Warranty Items,
Receipts – Household,
Receipts – PersonalFamily. (Those with kids might want to break down the last one into two files, Receipts – Personal and Receipts – Children.

TIP: If you don’t have a filing cabinet or drawer, an accordion file or a metal box that will hold hanging files works very well. Space permitting, keeping this group of files where you can see them will motivate you to read, file and pay.

Minutes 12 to 18

Go through the home office, odds and sods drawers, pockets, shelves, wallets, purses, shoeboxes or anywhere you might have stashed anything financial from receipts to statements, notices and bills. Don’t forget briefcases.

Minutes 19 to 25

File your statement and bill pile. Anything not opened or read goes into the To Read folder. Make sure all recent bank, credit card or investment statements go here if you haven’t read them thoroughly and checked to ensure service and interest charges, debits, credits and purchases are noted correctly. Put anything to be paid in To Pay.

Tip: Many of us opt for e-statements, which are easy to glance over without really reading, let alone checking each transaction. My preference is to print them and run down the activity list in your account ticking off each item as you go. Yes, you are using ink and paper, but for financial transactions it is important to look at what has gone on in your account, not just scan the bottom line.

Anything already read and paid should be filed right away.

Minutes 26 to 30

Go through your receipt file. Anything you need to hang on to for warranty, return or tax purposes (medical, dental, kid’s activities) goes in the To File folder. Hang on to grocery and liquor store receipts for a couple of weeks and clothing or household items for six months. Keep things under warranty for a bit longer than the guarantee period as retailers and manufacturers will sometimes replace or repair items anyway.

You might not get it all done in 30 minutes but you will have made a great start on taming your financial tiger with this mid-summer clean up.

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