Financial Organization: A Weekly Habit

Probably the most important habit of financial organization is maintaining your in-flow and out-flow systems. If you know how to handle each financial related tasks and their accompanying paperwork or electronic version as they come in, then it can’t pile up to a level where you are overwhelmed or feel defeated.

Ebb & Flow of Financial Organization

By now you have a financial organization notebook, chronicling your goals and what gets in your way. You’ve also set up physical files to store your important financial paperwork. One area that my clients seem to trip up is in the managing the flow of “stuff” that come into their lives related their finances. For some, it’s actual bills that appear in their mailbox. For others, it’s the electronic notifications of bill payments and financial statements. Regardless if you prefer to handle paper or its virtual equivalent, here are a few financial organization tips that I’ve found to actually work.

Wrestling the Paper Beast of Financial Organization

Now that the space where you handle your financial life is more organized, let’s tackle the paperwork that needs storing.

I always tell my clients that what works for me may not work for them, and there is no one right way to store files. My first words of advice regarding achieving overall financial organization is to be consistent with your filing system, whether it’s electronic or for actual paperwork. For example, if you use different kinds of labels for keeping electronic statements on your computer but it’s different than what you keep in your filing cabinet, you’re just making it harder on yourself. It’s like having to switch mental gears going from one system to the other. And, if you’re running a business out of your home office, you’ll want to keep separate files.

If I’m setting up a client’s files from scratch, here are the main categories I might create (in alphabetical order):

  • Bank Accounts
  • Business Expenses
  • Business Income
  • Children
  • Credit Cards
  • Employment Income
  • Household Related Expenses
  • Insurance
  • Investment
  • Legal
  • Medical
  • Pets
  • Vehicles

The key is to keep it simple. If the file gets full to overstuffed, it’s probably an indication you may need to some purging of old stuff.. or you need to break it down into a smaller category. If the file has one measly piece of paper, perhaps you’ve sliced your categories too thin. It’s a balance, one that’s personalized to your financial organization system. One little tip I’d like to share that’s made a huge difference for me; a friend who is a professional organizer suggested using a labeler for files. Replacing those file folder stickers with a neat label is a time saver. It also makes your files look neater and oh so organized! … a psychological boost if you’re wrestling the paper monster.

Storing Financial Records

Typically you only need one year’s worth of information at your fingertips. While there may be a few exceptions, think about the files you rarely access for historic information. For paper bank records, you really only need to keep for about a year, unless there is some income tax significance, in which case you should save those for 7 years. Otherwise, my advice is to shred it. Of course, consult with your tax professional or accountant for the timeframes right for your specific situation.

Another financial organization solution may be investing in a high-speed scanner like a Fujitsu ScanSnap. For under $300 you can quickly scan important documents and store them electronically. There are several services where you can save it on the cloud (like Dropbox). Don’t trust the cloud yet? No problem, you can still store it electronically on an external drive. Then store it offsite like a safe deposit box or a trusted friend’s home. It’ll be there if you need it, but it won’t be cluttering up your office filing system. More and more banks are discouraging the use of paper statements now, so I save mine as pdfs, which are stored on my computer in a file just for them, and backed up externally.

Of course there are some documents that you’ll need to keep forever, like birth and death certificates, passports, marriage licenses, etc. For homeowners, you’ll want to keep records of real estate purchases and sales, as well as receipts of any capital improvements as they may be used to determine your tax basis.

Next time we’ll discuss how to handle the ebb and flow of paperwork.

Physical and Visual Clues of Financial Organization

Today’s blog is dedicated to my Grandma Lois, who’s birthday is today, June 22. She’d be 114 if she were still alive. It was she who taught me how to balance my checkbook when I was 18 years old; we sat at her very organized desk as she led me through the practice of reviewing my bank statement and filling out the reconciliation form on the back. Little did I know, way back then, that the skills she taught me, and the values she instilled in me would be the foundation of the work I love today.

Financial Organization is Physical

Last time we tackled organizing the small spaces we carry around with us like our wallets, purses and briefcases. One area that I find that often hinders my clients to financial organization is the physical space where they manage their finances. Some lucky clients have a room dedicated to a home office, complete with filing cabinet, desk and bookshelves. Others have limited space, and they need something small and portable. Regardless of your space situation, keeping things simple and uncluttered is the key.

According to the National Association of Professional Organizers (NAPO), “there are no cookie-cutter solutions to any organizing issue because we are all unique. ” That’s why one organizational system works wonders for one person but fails miserably for another. NAPO describes getting organized as a journey, one that requires an investment of time and self-reflection.

  • What does your current space say about your financial organization journey?
  • How does it make you feel?
  • What gets in your way?
  • What’s working?
  • What can you eliminate?
  • What do you need to add?

Financial Organization is Visual

Take some time to visualize the space you really want. Imagine paying your bills and other financially related tasks. How does that make you feel? Write it down, as those feelings will give you clues to how your physical space can support your financial organization journey.

If you get seriously stuck, then it’s time to call in a professional. There are 4,200 professional organizers to choose from, and you start by using NAPO’s website to search by zip code.

I can’t emphasize enough the importance of an organized and uncluttered space to work in. Visual clutter is even a study topic at MIT, where they are developing ways to measure it! If you need more ideas on how to tackle that office clutter, check out this article by Janet Taylor on 25 Tips to keep your office organized and running smoothly.

Do you have any organizing tips to share? How have they helped you to a more financially organized life?

Simple Financial Organization By Starting Small

Now that you’ve answered the 3 key financial organization questions and explored your emotional relationship to money, let’s lighten up. Literally. Pull out your purse, wallet, briefcase or backpack. Chances are that if you’re feeling financially disorganized, then these areas have a bit of clutter to clean up. In fact, did you know that May 15 was “National Clean Out Your Purse Day”? The very first step to organizing your finances, is to start with the foundation: your portable money zones.

Empty your purse, wallet or bags that you typically carry every day. First eliminate the trash. Stale cough drops. Gummy lip gloss you’d don’t like to use but have on hand for “just in case.” Toss any items past their expiration date or you haven’t used in ages. For those ladies who tend to carry stuff for others, make a separate pile. Chant this mantra: toss it! Business cards from someone you’d don’t remember from some networking event? Toss it! I suggest using a large surface like the dining room table to sort as well as a trash can handy.

Now that you’ve got a pile of things you want to keep and organize, sort by category. Categories can be: make-up, hair supplies, receipts, money, credit cards, receipts, etc. If you’re carrying four shades of lipstick, that’s probably too many. Pare things down. Remember, you want simple as you create financial organization in your life.

Next up, let’s tackle money, credit cards and receipts.

Are you one to stuff money into the nooks and crannies of your purse? Do coins end up at the bottom? How you handle money provides an important hint. Crumbled and jumbled bills mean a lack of respect for money. Make it a habit to organize the cash in your wallet. Here’s a tip I learned from my Grandmother Lois that really works: When sorted by denomination it’ll make it easier and faster at the checkout stand, and you’ll always know how much money you’re carrying around.

How many credit cards do you carry? If you have one of every kind, including those for department stores, it’s time for simplicity. I suggest having one for personal, one for business if applicable, and leave the rest at home.

If your wallet was stuffed to the brim with receipts, you’re not alone. An easy way to deal with receipts is to separate them into envelopes. Label them accordingly. Here are some examples:

  • Tax deductions
  • Purchases that need to be reconciled with your accounts
  • Medical reimbursements

A little later we’ll discuss how to maintain receipts as part of your financial organization routine so they don’t get out of control.

Now repack your purse, briefcase or backpack. If your purse doesn’t provide the organization you need, consider a purse organizer. In my opinion, they are well worth the investment. You can easily find one under $20. Be sure you don’t over-stuff it; remember the goal is to lighten your load.

Do you have any tips to share that keep your purse or briefcase organized?

Uncovering Money Beliefs: Your Financial Organization Foundation

As I help my clients create financial organization in their life, I find that it’s critical to understand the underlying emotional reasons that caused the situation. Don’t worry, I’m not talking about regression therapy or hypnosis; I’m not a financial therapist (although there are some good ones out there). This is information I’ve learned along the way from reading some good books and articles on the subject. Simply pull out your notebook or journal you’ll be using on this journey. Think back to your earliest recollections about money. These questions may help jog your memory:

  • How did you learn about money?
  • What was your parents’ relationship to money? Did they have similar values about money or did they argue about it?
  • Did you receive an allowance? If so, what did you do to earn it?
  • Did you feel secure about money growing up?
  • Was your financial situation similar or different from your friends? Do you remember feeling privileged, disadvantaged or the same economically?
  • What’s your major issue with money today? How does it relate to how you experienced money while growing up?

When working with a financial organization client — let’s call her Amy — she completed this exercise. Growing up her her life was stable. Her parents worked hard but money was never discussed. Her father was generous, giving her money when needed but Amy had to ask for it. On the other end of the spectrum, her mother had a hard upbringing where money was tight. Whenever Amy was given money — even after earning it through chores — her mother would comment on how spoiled and ungrateful she was. Fast forward thirty years later, Amy struggles with her relationship with money. She feels others control the money she receives and often feels guilty about what she earns. Once Amy realized how these mixed messages formed the basis of her relationship to money, she could take steps to improve it. Part of Amy’s homework was to read Overcoming Underearning by Barbara Stanny. She’s now exploring how her beliefs about money affected her profession and earning expectations. Need some help uncovering your own beliefs around money? Then try this money belief quiz from

So, were there any surprises when completing this exercise? How would you describe your relationship to money? How is it impacting your journey to financial organization?

3 Key Financial Organization Questions

Last time we discussed how to begin a quest for financial organization. So let’s get started. The first step, assessing your current situation, will help you create a realistic plan. Acknowledging where you are will impact how you move forward. It also creates the  practices you need to put in place to create that financial organization.

Before changing anything… and I mean anything… you need to take stock. Let’s begin with your starting point. Take out your blank financial notebook, and let’s dig in.

3 Financial Organization Questions

As you write your answers down, take several minutes to reflect. Remember, you’re building the foundation of a financially organized life. What you put in is what you’ll get out of this journey. I suggest giving yourself at least 20 minutes for this exercise, giving yourself the time necessary to contemplate honest and complete answers. 

  1. What are your 3 biggest financial challenges?
  2. What are your top 3 goals for this year?
  3. What are your top 3 financial strengths?

Last year when I helped a couple get more financially organized, they had problems with 1) overwhelming credit card debt with minimum payments they couldn’t handle anymore, 2) a hefty mortgage payment and 3) a income deficit due to the husband being laid off and unable replace his six-figure income.

Sadly, this situation isn’t uncommon; many families were affected by the economic downturn. While this couple’s situation was a combination of forces out of their control, some of the issues were a direct result of how they (mis)managed their money.

In completing this first exercise, they decided their one year goals were: 1) to create a workable plan to regarding the credit card debt and change their habits in managing it, 2) seek a home loan modification, and 3) find alternative income so they could keep their home. Fast forward twelve months. They received a loan modification and rented out spare rooms. While they are still working on improving their financial situation, they have stopped their reliance on credit cards to make up the monthly income shortfall. In essence, they succeeded in creating and maintaining a workable financial plan.

So, how did it go in answering these three questions? Next time we’ll examine your past and uncover your money beliefs.

A Quest for Financial Organization

Now that tax season is firmly behind most of my clients, I’m reflecting upon the whirlwind of getting documents in order, Quicken reports run, and generally putting tax year 2011 to bed. Every year my clients declare “next year will be different!” They promise to keep track of their mileage, reconcile their bank accounts monthly, and vow to keep their financial world in order. Yup, I’ve heard it all.

In the coming months, I’ll share my best financial organization tips. My hope is that these tidbits will help you gain order and control over your financial life. Taking a piece at a time, next year’s tax season could be a breeze. Or for some, it will reduce what feels like an F5 hurricane to a windy tropical storm.

First Step to Financial Organization

First, I’d like to preface this discussion about financial organization. Money is neither good or bad. It just is. How much you have in your bank accounts is simply feedback. By examining your financial situation and organizing it, it’s a way to bring clarity and simplicity into your life. Someone described money as “stored energy,” meaning you spent time and effort earning dollars. By saving money, you’ve stored that energy to tap into later. I think of money as a tool, one that you control.

As you embark on this journey, I suggest pondering these questions:

  • Do you have a financial plan? If so, why? If not, why not?
  • What’s your relationship with money?
  • Do you have a tendency to save it, spending it miserly? Or, do you spend it freely without regard to long-term consequences? Not sure? Check out this money personality quiz.
  • What do you think is your biggest financial organization hurdle to overcome?

The answers to these questions aren’t right or wrong. It’s feedback on your relationship to money. That’s the first step, understanding how to feel about having (or not having) money, to creating a workable financial plan.

Next time we’ll talk about a notebook as part of creating a financially organized life. So, your homework is to dig around and find an empty notebook or three ring binder.

Identity Theft Through Smishing

Similar to “phishing,” the latest con scammers are using cell and smart phones to smish victims out of bank account information. Identity theft has hit a popular communication tool: text messaging.  In my work at keeping my clients financially organized, I see how easily our financial privacy can be compromised.

What is it?

Here’s how it works. Identity thieves pose as your bank and send a text message alerting you that your account, ATM card or credit card is close to the limit, or has been frozen.  The text usually instructs victims to call a toll-free number to fix the problem.

Think you wouldn’t fall for it? Well, a very smart you person I know – who is Internet- and texting-savvy – fell for it hook, line and sinker. Identity thieves are pretty crafty, using bank-like language that can be hard to spot.  In this person’s situation there was bad and good news.  She gave away too much personal information to the scammers. However, she quickly realized her mistake, and since she happened to be near her bank branch she went in immediately. The bank staff worked diligently and shut down the accounts before any money was taken and a new debit card was sent to her within 48 hours. Fortunately for her this identity theft story had a happy ending without losing a penny. It doesn’t here though; since her name and social security number was compromised, she’ll have to monitor her credit report for years to come.

How to Protect Yourself from Identity Theft

There is a trend in banking to help consumers manage their finances. You can set up alerts to let you know when deposits are posted, when your balance falls below a certain dollar amount, or notification of an unpaid e-bill is due.  These texts are legitimate since you have authorized your bank to send you these communications.  If you receive a suspicious text or email, don’t rely on the phone number included in the correspondence.  Don’t respond to the text by sending a reply. Instead use your bank’s website or current statement to find their toll-free number.

What To Do After Being Scammed

If you think you’re a smishing or identity theft victim, call your bank immediately. For additional ways to defend yourself, check out FTC for frequently asked questions about how to recovery from identity theft.

If you have identity theft protection, call your account monitoring provider. If you don’t have identity theft protection, consider getting a policy. For as little as $100 a year, it’s great insurance should your accounts be compromised. 

Need help monitoring and reconciling your accounts? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at or call (650) 956-4090 for a no-cost, no-obligation appointment.

Organizing Financial Paperwork for 2012 Taxes

For most of us, the tax season is officially over. However if you’re like millions of other Americans who filed extensions because they weren’t able to finish by the April 15 deadline, you may still be knee-deep in paperwork.

With the flurry of activity around taxes that consumes us, now is the perfect time to think about how to organize financial paperwork and set up a system so 2011’s tax season is a breeze. Use your CPA’s tax organizer or last year’s tax return as your guide:

  1. Mortgage Statements.  If you own property, have a separate file (virtual or real) for your loan statements reflecting payments including interest paid and principal balance. Many financial institutions have a running tally of how much mortgage interest you pay. This is an excellent source of information for your CPA or tax preparation professional to forecast your 2012 tax bill.
  2. Paycheck Stubs. Keep the information that accompanies your paystub. Again, this is great info for planning next year’s tax bill. Maybe you need to claim more deductions to increase cash flow, or decrease them to eliminate a hefty tax bill come next April.
  3. Business Income & Expenses. If you’re a contractor or self-employed, invest in a program that specifically tracks income and business-related expenses.  Quicken and QuickBooks have most of the standard reports you need as well as the categories (e.g., auto repair vs. gas) already loaded. Be aware that some customization is usually required. Setting it up correctly will save you dividends – your time and unnecessary heartache – when its crunch time. If you need to file quarterly taxes, you’ll want easy-to-use reports needed to organize financial documentation.
  4. Charitable Contributions. Use a value guide when donating non-cash goods to your favorite charity. The Salvation Army updates their valuation guide regularly. In my practice, many of my clients ask me to research the charity for legitimacy.  Check out as it’s a great resource in learning about a specific charity and where monies are spent. You can also get a tax break if you volunteer. While you can’t deduct the value of your time, you can deduct a portion ($0.14/mi*) of your mileage.

    Speaking of mileage, keep a log and tally it up monthly and file it in your new 2011 tax file. Come tax time, it’s already added up and documented. *Check with your tax professional for your specific situation.

  5. 2011 Tax File. If you have a file cabinet, create a tax file now so you have a place to stash receipts you’ll need for next year.  If you’re short on storage space, most people only need as much space as an accordion file from an office supply store. They close securely and allow you to label different slots so you can easily review and retrieve important paperwork.

Need help to setting up and organizing financial paperwork or keeping track of business expenses? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at or call (650) 965-4090 for a no-cost, no-obligation appointment.