Starting out, both for our blog and your finances, we’re going to begin with some basics you may or may not know.

Whether you’re just starting to figure out your finances or you want to overhaul your entire financial situation, one of the most important things to do is get yourself organized. There are questions you will need to be able to answer to move forward. Do you know where all your money is (banks, mutual funds, stocks, etc)? Do you have all the relevant information you should have about your money (statements, account numbers, balances)? How much debt do you currently have?

If you are looking to get a hold of your financial situation, getting organized is a simple first step, especially when you don’t know where to begin. If you don’t know the ins and outs of what you currently have, you won’t be able to plan for the future. Also, if you’re not a naturally organized person, it will be even more important to take this first step.

Start by collecting the information about where your money currently is. If you receive statements, all the relevant information should be included on them. If not, call the financial institutions or find them online and retrieve the info that way. Do the same for the debt you have. You may be surprised at what you find. Also, you may find this first step easier if you start with the current month’s information. You can always work your way through the rest of your financials as you move through the process.

Once you gather all the information, decide on a filing method. Do you have a filing cabinet or a plastic filing bin? File folders? A three ring binder? If not, buy yourself some supplies, which can be found for cheap at any office supply store or large retail outlet.

Then decide on an organizational method—some way of easily distinguishing sections. Maybe it’s color coding and labeling, maybe just labeled dividers.

Create files for important receipts and warranties, and for unpaid bills. If you pay bills online and don’t receive paper statements, create reminder notes about when the bill is due and for how much. How many files you create is a personal decision. The important thing is that you create a filing system that makes sense to you and that can be maintained for the long run, but not “organized clutter.”

One of our favorite ways to organize financial papers is a three ring binder. A binder is a great choice because it is easily accessible, easily updated when changes are made, and you can fit a lot of information in a small space. Just make sure you have a three hole punch before you start!

Make copies of important documents (insurance policies, wills, trusts, etc.) and place them in the binder for reference. Originals of these types of documents should be kept in a safe place, like a safety deposit box or fireproof lock-box. Also, gather information on all the bills you pay, receipts on any major purchases, and warranties. Information on accounts (companies, account numbers, etc.) can also be kept in this binder.

Obviously, how difficult this task is going to be is based on how much information there is to organize.  Just be sure you gather all the information relevant to your financial life. Once you know what you have, it becomes much easier to decide what to do next.

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