Organize Your Financial Records

April 24, 2012 , In: Organize

Ugh, I just barely made it through tax time sane and sober and now I’m writing about it. Most people make New Year’s Resolutions; this year I made tax time resolutions. You know the kind, I’m going to keep my receipts organized, I’ll enter everything into Quicken and maybe, just maybe I’ll stick to my clothing budget.

I’m supposed to be an expert organizer so you may be wondering why the subject of financial organization has me stressed out. Well, I have a good reason (at least it seems like a good excuse, um reason to me). I moved twice in two years and one of those moves was cross-country. Prior to this, I had lived in the same house for 12 years. When you move, your organizing systems inevitably change. That once convenient spot for keeping bills to pay is suddenly not convenient in the new house. And in my newest house, my home office is the furthest room from the mailbox. Bills and receipts began to accumulate on the stairs, just hoping for a kind soul to drop them in their spot on the desk upstairs. It didn’t happen. I have teenagers and although I love them at this stage in their lives they’re souls are not very kind. So my bills and receipts didn’t make it upstairs and as I sat down to prepare for taxes I was completely and utterly overwhelmed. What should have taken an hour took an entire Saturday. I created the Financial Organizer and wrote the content, what happened to me?

I resolved to get organized so this doesn’t happen again next year. Here is what I did:

Created a designated incoming paper zone by hanging wall pockets inside the hall closet. This was as close to the front door and incoming mail as I could possibly get. Having your paperwork sorting center as close to the source of paperwork as possible eliminates any detours on the kitchen counter or other available surface. I don’t like to see bills and paperwork so I hung the wall pockets inside the closet.

I labeled the wall pockets. Bills, Medical, To Do, To File and School. It’s tempting to just get the bins in place, but if you don’t follow through with labeling you will very quickly have a disaster on your hands. Plus if you want your family to help, you will need labels. Keep your system as simple as possible. For some people to pay, to do and to file is enough.

Here is how I organized my financial records specifically:

In the bills wall pocket I keep my Financial Organizer. As bills come in I slip them into the pocket for the month they are due. I also collect receipts in here. When I sit down to pay bills each month I keep the paid bills in the pocket and place tax related receipts into the tax records pocket.

If a receipt needs to be kept for other purposes I make a copy. For example your car registration may be tax-deductable, but you may also want a copy in your auto file. If you buy a new printer for your business you may want a copy of the receipt with the manual for warranty purchases and a copy in your Financial Organizer for taxes. Make copies when you pay your bills and resist the urge to simply file the receipt. Anything tax related should stay in the Financial Organizer.

At year-end I’ll toss paid bills, like the water bill for example. If you take a home office deduction you may need to save copies of all your utility bills, you should check with your CPA first. You should also keep bank and credit card statements. Keep them sorted by month in the Organizer.

Once my tax return is done I’ll slip it into the Financial Organizer as well. There is a pocket specially made for it. In case of an audit I’ll have everything I need in one handy location.

With all the extra time I have because I’m so organized I think I’ll go shopping, I can’t be expected to keep all the tax time resolutions….


    • Kara
    • April 24, 2012

    Love this idea…I’m just curious as to which wall pockets you used?

    • Holly
    • April 24, 2012

    I used plastic wall pockets from Office Depot. Since they were going to hang inside the closet I didn’t get fancy. You can spray paint the clear plastic wall pockets white or line them with paper for a fun look. I do like the magnetic wall pockets from three by three for storage out in the open.

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