Organizing yourself to financial success

“How do you know where you are going, if you don’t know where you have been?”

I am a big fan of measuring performance through numbers. Numbers have no political agenda or emotions. They simply measure a result.

In business, if I spend $10,000 on a trade-show, how much business have I got back from that? If its less than $10,000 then perhaps we shouldn’t sign up again next year. But most of us do not take this type of analysis in our personal lives because we don’t have a proper record keeping system. Watch any television show where they do a financial make-over and what’s the first thing the host does?

Makes the person organize their financial lives so they know where they are at. You can’t plan the future without figuring out the results of your past and adjusting accordingly.

When I was a little kid, my parents always argued about our “great” dining room filing system (he says with sarcasm). Everyone just threw the mail into piles onto our dining room table (we ate in the kitchen).

Organized

My Mom always tried to clean it up and my Dad was always saying “don’t touch my stuff!” (I suspect a lot of you are nodding your heads remembering similar discussions at home). Of course, come tax-time, there would always be a mad scramble to find this tax stub or that statement, buried somewhere in piles.

I am known at work as the pile guy- I file in piles at my desk (gee, wonder where that came from?) but I believe I am pretty good at getting myself organized on my personal finance side. I am not a personal organizer but this is what I do:

  1. I had my desk built-in with a shelf over it when I first moved into my condo. This is where I put all my current filing. My last year’s records are in the condo for easy access and everything else is in storage.
  2. I have two magazine files on my shelf over the desk. I bought them at Ikea for a couple of bucks each. One is labeled “bills” and the other “filing.” As soon as I get the mail, I file into one of the two files- immediately; no mail piles. Everything that doesn’t fall into those two categories, I recycle. Every Sunday I empty out both by either paying the bills or filing.
  3. I have separate binders for the following: (i) financial statement (bank statements, transaction records from stock trades, portfolio statements etc.); (ii) mortgage and condo related material (this is where I keep the legal documents from the purchase of the condo and mail from the mortgage company); and (iii) car and home insurance (my original insurance policies, I keep in a safe). These binders are on my shelf over the desk. If I sell a stock, I immediately find the stub where I bought the stock and stapled them together- it makes it easier to calculate capital gains that way (well… if I actually sold things at profit…).
  4. I have a separate file folder for receipts where there may be a warranty attached to them (i.e. computer hardware purchase, television etc.) and for credit card statements. This I keep in a drawer.
  5. All the tax related correspondence goes into another file folder in a drawer. This helps me keep organized for tax time.

That’s it. I can access data easily, compare against last year (non)performance and don’t have to worry about piles. Plus, its all close to my work area so its contained. This system probably cost me about $25 in binders, file folders etc.

For goals, I have a bulletin board in behind my computer. I write my goals down on a sheet of paper and stick it to the board. I have to stare at my goals every single day. I also put these goals in my binder containing financial statements. Its a reminder of where I need to be every time I file.

If you are reading this blog to get your personal financial life in order then think about literally getting yourself organized first.

Any readers care to share tips on organizing their personal financial lives?

8 Replies to “Organizing yourself to financial success

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