Organize to Economize
By Jean Marie Herron
When organizing your money, the skill set is not that different from organizing one's "stuff" but at least you can see your possessions when you open a closet door. It is much harder to find and remember where all your money is if you can't visualize it. For example, when you look in your wallet and you're down to $10 cash and you wonder where it all went since you last made a withdrawal. So follow POSSE's advice below so you can economize your financials before the holidays and New Year budgeting is upon us.
1. What are your goals and roles?
It will be easier to budget money if you write down your financial goals. For example, "I want to own a beach house in Aruba by the time I'm 55" gives one something to strive for. Maybe you can put a picture of your dream house on the refrigerator and each time you want to go out to dinner and spend $75 you'll decide to have leftovers because you saw the photograph. Maybe that $75 saved just bought you a new mailbox for your new address!
Also know the roles each person plays in the family finances. Is the bill paying and investment planning communicated and is the chore of this life skill properly distributed amongst those responsible? Does one hand know what the other one is doing and if there is ever a crisis, can the survivor get to the money?
2. SORT your financials. Go through all your papers that touch your money in any way shape or form. You'll end up with different categories such as:
- Bills
- Taxes
- Insurance(s)
- Banking
- Loans
- Investments
- Credit Cards - I recommend you have very few of these and each month go through it with a highlighter sorting these cards into categories such as:
- Dining
- Groceries
- Gas
- Clothes
- Entertainment
Unless you track it, we are not going to be able to attack it! I highly recommend you utilize a little spiral notebook or your Blackberry for two weeks and write down everything you spend over $2 in it. Then sort your notes into categories just like you did your papers at home. Now you'll know (since you wrote it down) that you spend $3 a day Monday through Friday buying coffee before work which equates to $15 a week, $60 a month and $720 a year.
3. Become SELECTIVE about what you want to spend money on and what you want to save.
Using the above coffee example, you be the judge as to whether or not it remains in your budget, needs to be trimmed or needs to be padded. Be honest with yourself, it's your money. Here's where you can decide to pare down the new clothes budget and up the college funds.
4. PURGE what you can.
Time to shred the old papers that do not need to be kept other than for taxes or personal reasons. Time to cancel services you may not be using. Are you really listening to $200 a year worth of satellite radio or reading all those papers and magazines? As you slice and dice, consider what might be important to take its' place such as saving for a new car or getting some new appliances.
5. ORGANIZE/CONTAINERIZE/LABELIZE your "keep" pile of finances. 
Now that you know what you're keeping, it's time to organize it into logical homes. Some of my favorite homes for financials are:
- File cabinets or binders for hard copies
- Computerized budget either created yourself or purchased software
- Fire box/safe for home and safe deposit box at a bank
- Decorative box for temporarily hiding receipts until you purge/file them
- Bill paying center
- A "To File" tray
- A "Review with Significant Other" tray
- A Family Financial Contact Sheet (see my tip of the month)
6. EQUALIZE/ENLIST/ELIMINATE/ENJOY your newly organized finances by putting a system in place to maintain it.
Now that you've taken the time to sort all your papers and money categories, carefully selected what money is going to be spent and saved, purged what you do not need anymore, and organized anything monetary so it has a home, we get to our last step which is equalize. This is your self-discipline. It means what are you going to do so that you enlist people to help you, constantly eliminate the unimportant papers and enjoy your new found peace knowing you have all your ducks lined up in a row? Here's a sample of my E so that my office doesn't get too out of control:
- Daily - go through the mail and bills go to the bill-paying center.
- Weekly - file the financial papers and have a communication powwow with the husband. Computer also gets backed up weekly.
- Twice a month - write all bills and enter on computer.
- Monthly - enter credit card charges on computer, balance bank statements.
- Quarterly - visit your financial planner, purge investment papers excluding quarterly statements.
- Yearly - purge filing cabinets, review this year's budget and revise for the new year.
- Ongoing - Update any papers that need to be secured in fire box at home and safe deposit box at the bank.
Now that you have the recipe SSPOE you can utilize it on any organizing endeavor, not just money. So if the economy has you down, take the time to organize to economize.
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At POSSE Partners, LLC (Professional Organizing Solutions Serving Everyone) we cater to homeowners who want one-on-one help with their organizing endeavors whether it's their space, papers or time. Besides transferring these organizing skills to our clients, we also hold organizing classes called Clutter Corrals, have a monthly forum for supporting each other called POSSE's Pen and we also give organizing presentations as well. To learn more about the author and owner, Jean Marie Herron, and sign up for her free newsletter go to www.POSSEPartnersLLC.com.
