Financial Organization: Steps to Improve Yours

Last Updated Jan 27, 2011 12:11 PM EST

If you want to be successful in reaching your financial goals, then read about these three simple but effective steps. Before you can make real and lasting progress on your financial goals, you need to organize your finances. And how do you know that you could use some improvement in this department? Well, for starters, how you answer these questions will tell how well your finances are organized and managed:
  • Have you recently paid a bill late because you misplaced it?
  • Do you have a recent copy of your credit report?
  • Do you know your credit score?
  • Do you have a list of all accounts, numbers, online IDs and passwords?
  • Do you have a list of all retirement accounts and life insurance policies including beneficiaries?
  • Do you have wills, living wills and durable power of attorney documents?
  • Do you have a specific financial plan for paying down your debt and building your savings, with specific dollar amounts, goals and dates?
If you don't have a good answer to most of these questions, then, like many folks, you could benefit from a plan to better prioritize and organize your financial life.

Here are a few steps to help better organize your financial life.

Organize Paper Clutter
Those piles of papers, bills and statements cluttering the kitchen counter have to go. Replace it with a filing system organized by account and category that includes folders for bills, tax documents, statements and personal mail. Then put the filing system to use by filing your bills and statements as these come in rather than letting them pile up on the counter or desk. The important thing is to use a system that works.

Close out your checkbook register at year-end and start a new one beginning January 1st. File the register from last year with the 2010 tax statements you will need for your 2010 tax return. Use a multi-file box for your tax return and related statements. These come preset for this purpose.

Keep insurance policies, wills/trusts, birth/marriage certificates, passports and other hard to replace documents in a fireproof safe box. Also, keep a back-up copy of the financial records on your computer here. You can get a fireproof box online or from retailers like Wal-Mart, Home Depot, Lowes, etc. for about $30 to $150, depending on the size. Keep this in a safe place in your home.

Use a safe deposit box at your bank to store only valuable and irreplaceable documents and items. There are certain items that should not be stored here, your will being one of them. That's because at your death, the bank will seal off access to a safe deposit box until the court approves an order appointing a representative to oversee the opening.

I'll be back in a few days to provide more simple and effective ways to organize your finances. If you have a favorite tip of your own don't keep it to yourself....leave a comment for all to read.

  • Ray Martin

    View all articles by Ray Martin on CBS MoneyWatch»
    Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.