Decluttering your life means much more than just cleaning out closets and basements, it is about streamlining and simplifying how you do things. In addition to running the household, many of us are responsible for managing the family's finances- paying the bills, planning and sticking to the household budget, and even managing and tracking the family's financial investments.
But all of that paperwork, filing, and tracking can be overwhelming and can create its own mountain of paper clutter. This post is the first in a 3-part series on how to track your money. Today we will focus on how to get organized and set up a bill paying system.
Create an overview system for income and expenses
At the most basic level, you need to decide how you want to handle the check register- the place in which you will list all incoming and outgoing money moves. My favorite financial tracker is the free online system from Mint.com.
Mint allows you to link up to all of your banking and investment institutions and each time you log in, Mint gathers the latest financial data from these systems. So you have instant access to your account balances and where your money has been going.
Mint will also send you reminder notices for when bills are due, and best yet- will send you alerts to notify you of any bank charges or credit card fees that it thinks you could avoid- and suggestions for how to do so.
If you are looking for something a little more basic you can create a check register using an Excel spreadsheet. This is the way that I have managed our family's finances for years. Or if you are not quite so tech-minded you can certainly rely on the old-fashioned checkbook ledger (you know, the paper kind that comes in the box with your paper checks).
I also suggest that you create a free account with TrueBill– a free service designed to find, track, and cancel your paid subscriptions and recurring bills. It is easy to lose track of the fact that you signed up for an annual subscription for a service, and you forgot to cancel it when you stopped using it!
A bill paying system starts with… how do receive your bills?
Are you still receiving all of your bills through the US postal system? If so, it is probably time to think about converting your paper bills into ebills- where you receive all of your bills electronically (usually via email).
The less paper that you receive, the less clutter that you will have (because every bill known to mankind comes with extra papers stuffed inside plus a mailing envelope to recycle)!
One way to set up e-bills is by contacting each payee directly (which usually can be done online) and set your account up to go paperless. You will enter your notification information into the system (usually your email address) and each payee will send you an email when it is time to pay a bill.
Another option is to sign up for e-bills directly through your online banking system if you already paying all of your bills online (more on that below).
And while you're at it, cut down on the catalogs and other direct mail pieces that you receive by using CatalogChoice.org, a free service that helps you to opt-out of direct mailing lists.
Make a list of of the bills you need to manage
One of the biggest concerns that people have when they decide to go paperless is the fear that they are going to accidentally miss paying someone one month.
The best way to give yourself that peace of mind is to make a quick list of all of the bills that you pay monthly and the monthly due date for each. At the bottom of that page, make a list of bills that are paid only quarterly or annually.
I keep my list in an Excel spreadsheet with the payees going down the left-hand side, and the months going across the top of the page. This way I can check off each payee every month to ensure that no bills are ever missed.
Determine which bill paying system to use
I sincerely hope that you are enjoying the benefits of online bill pay- which is typically a free service offered by the bank where you maintain your checking account.
You simply set up all of your payees and your account information once. Then each month you just log in, enter the amount to be paid and the date of payment- and poof, the money is transferred automatically. No writing of checks, licking of envelopes or buying stamps.
If you haven't set yourself up to pay your household bills this way- then I urge you to seriously consider it!
Schedule time twice monthly to manage your finances
So a nicely organized system is great- if you remember to use it!
Help yourself out by setting up a recurring reminder in your calendar twice a month to pay your bills, review your accounts, and take care of your family's finances.
I hope that I have inspired you to examine the process you are using now to gather and pay your monthly bills and that you'll consider exploring some of the new methods of handling this process electronically as I have described.
There are two more posts in this series on How to Track Your Money: