How to Stay Organized With Your Money

This post is by our regular contributor, Erin.

Do you have a system in place to organize your money? Or do you just try and wing it every month?

As young adults, it’s easy to think we can get away with leaving our money as is. We don’t typically have too many accounts, and our finances are at a relatively manageable level in our early 20s.

But what happens when you decide to take your money to the next level and begin investing, opening up multiple savings accounts, or buy a home and have more bills to pay?

Remember, all it takes is a little stress, and our financial situation can get out of hand. It’s better to create systems now so we can build upon them later. If you want to learn how to stay organized with your money, read on for some tips!

Why You Need to Get Organized

Paying things as they come in only works for so long. That’s how I began, because the first bill I was responsible for was my cell phone bill. Obviously, that wasn’t hard to keep track of by itself!

However, when I moved out on my own, my responsibilities grew. Keeping track of car insurance, rent, utilities, and quarterly taxes became the norm. That’s not even naming variable expenses.

As you get older, your expenses are likely going to increase in number. I personally get overwhelmed just thinking about all the costs associated with owning a home, not to mention the different types of insurance you’ll need, or all the paperwork you have to gather for an estate plan.

If you’re someone who is a little scatterbrained, short on time, or doesn’t have a whole lot of motivation, you’ll benefit from getting a foundation in place to keep your money organized.

Use a Tool That Works For You

Keeping track of your expenses and budgeting is the first step most people need to take to keep their money organized. You need a framework to go off of! There’s no right or wrong way to go about this, so let’s review a few popular methods that may work for you:

• Spreadsheet: There’s nothing wrong with going the “old-fashioned” route of using pen and paper, or a spreadsheet in Excel or Google Sheets. It’s a low maintenance way to keep track of things, but that does mean you need to be diligent about filling things in. This is the method I went with when I started budgeting more stringently.

• Planner: I used to be really old school when I was in college. Since I was already using my agenda to track class assignments, I also used it to track spending. It was with me all the time so it was a convenient option. Plus, I like paper and pen more than technology at times!

• Cash Envelope Budget: If you’re sticking to spending cash, then this method might work well for you. At the beginning of the month, you determine how much you can spend in each category. Put that amount in an envelope with that category’s name marked on it. You can check the envelopes throughout the month to see how much you have left to spend.

• Apps/Tools: We covered the top 10 personal finance apps and tools here, and there’s no shortage to choose from. You’ll find everything you need in one of these, or you’ll find at least two or three apps that complement each other. If you want a budget program, a simple way to track spending, or an app that reminds you when bills are due, it’s all here.

There are a ton of tools and strategies you can use to stay organized with your money. Use the one that works best for you.

Take Inventory of Your Situation

Before you can organize your money, you have to know what your financial situation looks like.

In general, you need to know how much you’re spending, and how much you’re earning. Subtract your expenses from your income, and see what you have left. If there’s nothing, or a very little amount, you know you have improvements to make. Figure out where you can cut back, or try focusing on earning more.

If you’re in good shape and actually have money left over, then you need to make a plan for it. Are you paying off debt, saving, or investing? Figure out how to allocate your excess money toward your goals.

Set up Automatic Payments

I wrote, in detail, why you should put your finances on autopilot (mindfully!). Simply put, it’s the easiest way to ensure nothing falls through the cracks.

If you have your bills on autopay, then you can be fairly confident the payment will be processed on time. Setting up transfers from your checking to savings account means you’re saving in the background. Automatically transferring money to your retirement savings account helps, too.

As the post states, it’s important to check in every once in a while to make sure things are going according to plan. However, this is a much better alternative than waking up one day and realizing you’re late on a payment, or that you have absolutely nothing saved.

Keep a Document Handy

This is extremely important, especially if you have a family to care for. In the event something happens to you or your significant other, having your money organized will help a lot. You don’t want to have to deal with sorting out logins, passwords, accounts, etc. while in the middle of grieving.

This goes for singles who might be a bit scatterbrained, too. Having a single document listing out where your money is, and what accounts you have, will save you a lot of time and effort down the road. It can be frustrating answering dozens of security questions and jumping through hoops to retrieve your account information.

Obviously, you should keep this document secure – you don’t want random people getting access to your accounts! You can also write it down and lock it in a safe somewhere. Do what works for you, and let your family members know where they can find the information. It’s also a good idea to include instructions (i.e. when you pay things, how payments are scheduled, etc.) so your loved ones aren’t completely lost even with the account information.

What About Debt?

If you have debt with a number of different lenders, it could be worth looking into consolidation. This means you get an entirely new loan with a new lender, and this new lender pays off your old loans. Those old loans are replaced with one large loan from the new lender.

This simplifies your finances and can help you stay organized with your money because you won’t have to keep track of 10 different due dates and balances. Instead, you’ll only have the one loan to stay on top of.

Of course, there are many different factors you need to consider before thinking about consolidation, but I wanted to mention it as it can make a huge difference in how easy it is to manage your money.
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The key with organizing your financial situation is making it easy on yourself. Building a framework and inputting your numbers makes it ten times easier to keep track of everything versus having a bunch of things floating around in your head. Plus, the more organized your money is, the less time it takes to manage!

How do you stay organized with your money? What systems do you have in place? Do you prefer to deal with your money on a whim? 

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