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Making Finance Easy: Getting Organized

Simplify everything! Can you name your credit cards and their balances without looking them up? Can you name your bank and brokerage accounts without hesitation? Can you find financial papers at your desk in less than five minutes? Simplifying your finances (and your life) will make managing them easier. Making finance easy means making your life less stressful. Less stress means more fun.

Organize Your Workspace

The first place to start is to clean up your work area, whether it is your desk at the office, in the den, or the dining room table. The methods I use from time to time (at work and at home) are the Four Ds: Do it, Delegate it, Dispose of it, or Defer it. Take all of the paperwork on your desk and in the organizing trays and form a stack. Make a second stack if one starts to tumble. Your desk should be completely cleared off except for the large stack of documents, mail and files in front of you. Now go through the stack piece by piece and apply one of the Four Ds to each item.

“Do it” is a pretty straightforward procedure. When you come to an item in your stack like the letter from your sister you meant to respond to — Do it. The prospectus you requested and received from Hawthorne Fund, but never got around to reviewing — Do it. After you do it, decide if you want to invest in it — file it under “Investment Opportunities” if you do, throw it away if you don’t.

Some items should be delegated to someone else in the family or in the office. If your spouse is a car buff, give her/him the reminder card from the mechanic and let them take the car in for it’s regular tune-up.

Disposing of items is the most fun. It’s quick, easy and provides instant gratification (I have a large trash can and shredder by my desk).

Deferring something is the trickiest because it is tempting to defer items which should be done immediately or delegated immediately. Defer items which definitely need to be done, but they aren’t urgent. For instance, you get the renewal notice for one of your financial magazines three months before the subscription expires. Write a date on the envelope for when you should take care of the item and move it to the bottom of your stack. Some items need to be deferred because you’re waiting for additional information from someone else.

When all the dust has settled, you should have a much smaller stack of items which need to be done at a future date. You should also have clearly labeled files for the items you need to keep. If your current files are a mess, empty all of them, make a stack and do the Four Ds. Here are some common file headings:

  • Bank Account (one file for each one)
  • Mutual Funds (one file for each one)
  • Brokerage Accounts (one file for each one)
  • Retirement Plan (one file for each person)
  • Insurance - Home and Auto
  • Insurance - Life and Disability
  • Medical Insurance and Expenses (include receipts for medicine)
  • Estate Planning (one updated copy of your will, but not the original)
  • Work (updated resume, employee reviews, letters of recommendation, etc.)
  • House Purchase/Maintenance info
  • Automobile (service records, etc.)
  • Taxes (one file for each year for seven years)
  • Product Manuals (don’t keep manuals for items you no longer own)
  • Schools and Child Care
  • Personal Finances (financial statements, financial goals, etc.)

Now you’ve got a clean desk and neatly labeled files? Congratulations!

  Posted by: admin

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