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Organize Your Finances: You May Find Hidden Money

If you're one of those efficient, organized, motivated people with a pristine credit rating and no real skill set in procrastination, stop reading now. (And don't expect me to go drinking with you, either.)

This is for the rest of us. We who have piles of financial paper cluttering up the horizontal surfaces in our homes: overdraft notices, late-fee notices, you-could-have-saved-$250-if-you'd-registered-early notices, 401(k) enrollment forms that remind us we've lost months (years!) worth of company matching funds. And (Congress, are you listening?) those EOB ("Explanations of Benefits") letters from our friendly health insurer, denying our claims on the grounds that we missed the 90-day filing deadline. ("But I was distracted by my wife's Stage IV breast cancer that first six months!'' "Sorry, we can't accept such sloth.'' Note: This represents an accurate but unauthorized translation of Code A4987.)

The usual (useless) advice given for this problem is some variation on the ever-helpful Nike prescription, "Just Do It." But there is a better way. In fact, there are several better ways, employing various amounts of technology, psychology, and investment. Here are my top 5 tips.

1. Ditch the shame. Shame and guilt are a notoriously bad motivators, especially when it comes to behavior as entrenched as finance avoidance. As long as you are still hearing the voice of that special someone (Mom, Dad, Ex,) as they berate you, you will be incapacitated. So get rid of the shame, or at least confine it to a financial lockbox (you can probably get one at Staples). It also helps to share the shame with banks and others who, arguably, prey on the likes of us:

Take comfort in the thought that there is always someone who's even worse at this than you. (Isn't that why people watch Clean House?) And that this is an equal-opportunity disorder. One New York-based financial planner told me of a client who held a top executive job at a major New York firm but came home once or twice a year to find the power turned off due to nonpayment.

2. Go digital. The "Eureka" moment that led Scott Cook to found Intuit came in the 1970s, when Cook was sitting at the kitchen table with his wife Signe, and she complained about doing bills. Thank you, Signe. Thirty some years later, Cook's company and many others make software that's user-friendly, cheap or free, and designed to make this chore as painless as possible.

If the software is intimidating, start with online checking, which can automate everything from your mortgage and credit card payments to the school lunch account. Online checking does much more than eliminate pesky details like buying stamps and getting the envelopes off your dashboard and into a mailbox. It's much more than that. I'll sing its praises (and slam a few interfaces) in a future post.

3. Buddy up. Just as you rely on your raquetball partner or jogging buddy to help keep you exercising, line up a friend or two. Sit down together with margaritas and some good music and dig through your respective piles. Agree to weekly challenges ("By next Tuesday, we'll each open 50 envelopes and separate the contents into piles.") You can find buddies and support communities online.

4. Outsource. Our service economy is full of people who can come to your home and organize your life for you. There are organizers who will sit beside you as you work through the papers and help you create systems, digital or otherwise, to keep you from getting into the same hell again. Others will dump your papers into a box (or U-Haul) and take them home, then bring them back all organized and resolved.

The best organizer is someone who's not only good at her job but pragmatic, nonjudgmental (see No. 1, above) and has seen it all before.

If you doubt that it's worth spending $75 an hour or so on such services,consider Montclair, N.J.-based organizer Deborah Gussoff. While helping one client organize the kitchen and office, she told me, "Every place we turned, we found more medical bills and EOBs." They made another appointment just to deal with insurance, and in six hours together they submitted claims for 4 family members. Gussoff's total bill: $750. The client's total medical reimbursement: $29,974.35. And no, their insurer didn't have a 90-day limit.

What's worked for you? Recovering finance-o-phobes: please send me your techniques!

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