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9 Ways to Tidy Your Financial Paperwork and Stay Sane

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Whether you’re fully committed to the KonMari method, or your journey to decluttering is still beginning, many of us struggle to keep one area of our lives calm, clear, and organized: our paperwork. And while it can be tempting to shove every piece of paper you receive into a drawer and forget about it until tax time, the truth is that the quicker you deal with incoming bills, receipts, and so on, the easier things will be. And it’s not just about taxes — the point of keeping paperwork is because we do need to access it from time to time; the easier it is to get hold of, the more streamlined things will be.

Keep a place for everything and put each item away in its proper place. 

Just like regular organizing, sorting your paperwork depends on this system: having everything in a designated place and keeping it there. Think about all the areas of your life that require paperwork — your home, kids, pets, medical records, warranties, taxes, and so on. Buy a collapsible folder or ring binder for each area, label it, and keep all records, bills, and receipts in these folders.

Pay bills immediately.

Don’t let paperwork pile up. Pay bills as soon as you receive them, mark them “paid,” and then file them away. If you can’t pay straight away, mark the due date in your diary, attach the bill to the page, and pay when it’s due.

Take a picture — it lasts longer. 

Instead of keeping every single paper receipt you receive, take a clear picture of it and file it to an album in your phone marked “receipts.” There are great apps for keeping track of receipts now, too. And if you’re running a small business, apps like Expensify even connect to accounting software and extract all of the data from your receipts so you won’t have to manually enter all of the numbers and details.

Stick to the plan.

A system is only ever as good as its maintenance, so don’t let all your initial organizing go to waste by not filing things where they need to be. Once you have your system in place, either file things as soon as they come in, or keep them in a pile to be filed once a week.

Discard when necessary. 

Every year ­— around tax time is a good time to do this — go through old paperwork to see if there’s anything you can toss. Outdated insurance policies can be recycled, and so can tax receipts that are more than five years old. The same goes with old tax returns and any receipts for expired warranties.

Go paperless as much as possible. 

One surefire way to cut down on paper clutter? Do without it. Set up direct payments for regular bills. Not only does this cut down on paper, but it also saves time and your mental energy. You can also scan documents and then recycle the originals — just be sure to keep a backup of the digital files. And for receipts that are emailed to you, there’s no need to print them out and file away — simply create a folder in your email archive or on your desktop for them and keep them there.

Track things as you go. 

Rather than leaving everything until tax time, set yourself up with a system whereby you create a master spreadsheet and track all incomings and outgoings related to your taxes. You should track expenses weekly and create different tabs for each month of the year to make the figures easier to manage. If you’re not a whiz with spreadsheets and this idea fills you with anxiety, fear not — there are plenty of great templates out there for tracking all things personal finance.

Declutter the books every month. 

Just like you allocate time to clear out various things around the home, set a little time aside each month to declutter your finances. During these sessions, you should look at your savings, spending, income, loans, and anything else finance-related that you have. Cast your eye over statements, check everything is as it should be, check that you’re on track (adjust where necessary), and make sure you’ve scanned in all receipts, updated all spreadsheets, paid all bills, and gotten rid of any paper you don’t need. This way, not only will there be no nasty surprises (like accidental unpaid bills), but you’ll also be in a good position come tax time and won’t have to allocate days to get things in order before you do your return.

Our Number One Tip

Never mark a folder “other” or “miscellaneous.” This will inevitably become a dumping ground for paperwork, ruining all your good work. Make your folders specific and stick to them.

This post was written by Natasha Ledgerwood. For more, check out our sister site, Homes to Love.

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