Lesson 5: Creating a Financial Filing System
This week we are going to tackle your filing system. Some of you may already have a workable financial filing system in place, some of you will have one that doesn't work and there will be some who have no financial filing system at all.
Keeping your finances organized ensures you know what to keep, what to toss and what to shred and add to the compost or worm bin. You need to be able to put your hands on important papers at any time, without hesitation. By the end of this lesson you'll be doing just that!
There is a false perception that being organized is hard work and that only the BOs (born organised) amongst us achieve this. The truth is everyone is organised. It's just that some of us have systems that work and some of us have systems that don’t, and these defeat effort and destroy confidence in our ability to keep control.
Last week you spent time getting your home office into shape (you did, didn't you, I did and I'm loving the space and no clutter) and by now it's tidy and sparkling from ceiling to floor. At the end of Lesson 4 were some ideas for getting things into order, and this week you are going to put them into practice.
Gather the Basics
There are some basic supplies you'll need to create your very simple, very effective Financial Filing System that really works:
1 Lever arch folder
13 dividers
Sheet protectors
Labels
Marking pen
The good news is that if you don't already have these items in your office, they are on sale right now! Back-to-school is a great time to stock up on your office suppliesp you can use the stationery the kids didn't use last year, keep using what you already have or top up very cheaply at the back-to-school sales. Check the prices at your local discount department store, newsagent and supermarket as well as stationers. You should be able to gather all these things, brand new, for under $5 - that's a cheap filing system!
Keeping your finances organized ensures you know what to keep, what to toss and what to shred and add to the compost or worm bin. You need to be able to put your hands on important papers at any time, without hesitation. By the end of this lesson you'll be doing just that!
There is a false perception that being organized is hard work and that only the BOs (born organised) amongst us achieve this. The truth is everyone is organised. It's just that some of us have systems that work and some of us have systems that don’t, and these defeat effort and destroy confidence in our ability to keep control.
Last week you spent time getting your home office into shape (you did, didn't you, I did and I'm loving the space and no clutter) and by now it's tidy and sparkling from ceiling to floor. At the end of Lesson 4 were some ideas for getting things into order, and this week you are going to put them into practice.
Gather the Basics
There are some basic supplies you'll need to create your very simple, very effective Financial Filing System that really works:
1 Lever arch folder
13 dividers
Sheet protectors
Labels
Marking pen
The good news is that if you don't already have these items in your office, they are on sale right now! Back-to-school is a great time to stock up on your office suppliesp you can use the stationery the kids didn't use last year, keep using what you already have or top up very cheaply at the back-to-school sales. Check the prices at your local discount department store, newsagent and supermarket as well as stationers. You should be able to gather all these things, brand new, for under $5 - that's a cheap filing system!
Getting Started
Creating files is easy. Just gather like things together, grouping related expenses. This creates categories for your filing system. A category will group the many sub-categories, or parts that make up that category, together. For example you will have the category "Insurance". The sub-categories may be "House", "Contents", "Car", "Health" etc. This keeps all your insurance policies, statements, invoices and other related paperwork together in the one place. When you need to find something related to health insurance you go to the Insurance category and find the sub-category for health - you will have what you need in a matter of seconds, without worrying about where to find it.
This list shows categories and sub-categories for your filing system; adapt them to suit your needs:
Banking:
Personal Account
Emergency Fund
Peace of Mind Account
Day-to-Day Account
Bill Paying System:
Bill Payment Reminder Sheet
Pay Day Bill Payment Planning Sheet
Bill Summary
Daily Spending Record
Monthly Payment Push Planning Sheet
Financial History
Record of Donations/Charitable Contributions
Children:
Childcare
Camps/Excursions
Legal Documents
Medical Expenses
Medical/Immunisation Records
Pre-school Fees
School Fees
Sport
Credit/Store Cards:
Mastercard
Visa
Household Expenses:
Electricity
Gas
Internet
Mobile Phone 1
Mobile Phone 2
Mortgage/Rent
Rates
Phone
Water
Income Records:
Wage/Salary 1
Wage/Salary 2
eBay/Marketplace/Etsy etc. Sales
Insurance:
Car 1
Car 2
Income Protection
House: Building
House: Contents
Medical
Life
Investments:
Savings (Bank)
Shares
Superannuation
Legal:
Child Support
HECS/HELP
Will
Powers of Attorney
Guardianship Papers
Medical:
Bills
Claim forms
Records
Miscellaneous:
Pets
Taxation:
Group Certificates
Receipts
Returns - Wage 1
Returns - Wage 2
Tax Agent Details
Vehicles:
Insurances (Comprehensive, CTP, Third Party)
Loan or Lease agreements
Registration
Organising Your Filing System
This is your filing system so you can handle all the paperwork related to your finances efficiently. Add to or change the categories and sub-categories to suit your situation. We obviously don't keep anything child related anymore, because we don't have children - we have adults and they are responsible for their paperwork, so my filing system doesn't have a Children section - use the categories that apply to you, your family and your household.
You can see above that the categories are in bold. You may have all, some or more in your Financial Filing System, depending on your bills, income, savings and expenditure. Remember, this isn't your Spending Plan, it won't have the same categories. Take one of the folders and put 12 dividers in it. Write the name of one category on the tab of each divider. Label a sheet protector for each sub-category and slip it into the folder behind the category divider.
I like to work alphabetically, it keeps things orderly. This is my way of filing. You may choose to group your information in a different way. The way you file isn't set in cement, choose the way that will work best for you. But just do it! Don't overthink it and procrastinate because it's not perfect - you can make it "perfect" later, the important thing is to get started and get it done.
For example I have all the insurance papers in one file. You may choose to keep the car insurance papers in the Vehicle file and the house papers in the Household file. It doesn't matter how it's done as long as it works for you.
So what happens if, for instance, you have more than one car? Well Vehicles is still the main category. You will create sub-categories for each car, then the minor categories under that. Your file for the cars will look something like this:
Vehicles:
Navara:
Insurances (Comprehensive, CTP, Third Party)
Loan or Lease agreements
Registration
Services
Patrol:
Insurances (Comprehensive, CTP, Third Party)
Loan or Lease agreements
Registration
Services
"Vehicles" is still the major category and the divider will be marked accordingly. Then you'll have a sheet protector labelled for each car (Commodore, Patrol, Ford, My Car, His Car, Car 1, Car 2 or whatever) and file the paperwork for each car in its page protector.
When I need the registration information for the Patrol I go to the Vehicles section of my folder and can see at a glance the Patrol page protector and simply pull out the papers I need. No stress, no frantic searching and absolutely no time wasted.
This is a very simple and easy to use filing system, suitable for most households. There is no need for filing cabinets or expanding files. In fact for most homes having these items encourages hoarding and does nothing to increase the efficiency of the system. If you are tempted to use a filing cabinet or even a file box, think carefully. Re-read the system above and see if it really will work for you. One folder on a shelf or in a cupboard is much easier to use than a filing cabinet stuffed full of papers. It's cheaper too as there is no need for hanging files, manilla folders, fancy tabs and the like either.
Moving Forward
Now that you have created your Financial Filing System you have to use it. Get into the habit of filing regularly. You may choose to do all your filing on a Monday night after dinner or on a Sunday morning, or you may choose to file everything as soon as it comes in. The main thing is to actually do it. An easy way to remember is to only handle each piece of paper once. I personally find this the easiest method - handle paperwork once, as soon as it comes in, file it and it's done, I don't need to think about it again. When a bill comes in, mark it on your payment schedule, record the details, set-up the payment in Internet banking and file it. Done!
Have fun setting up your filing system in your new home office. Then make sure you use it! It really will save you money, save you time and save you energy.
Week 5 Challenge: Drink water!
With the hot, humid weather we have had this summer drinking water should be on everyone's radar. If you are a coffee or soft drink addict, it's time to break that addiction and start drinking water. Not only will you feel better but you'll save a small fortune too. Start by drinking two extra glasses of water a day. You can put a reminder on your phone or on your computer, or you can fill a drink bottle each morning and sit it on the sink or on your desk to remind you. For Christmas a couple of years ago, each of the kids was given a desktop sized water dispenser, that holds 3 litres. Novel, yes, but super effective too. They are all still working from home, so it's right in front of them so when they need a drink, they just pour a drink of water! You are starting small, with just two extra glasses of water, but ideally you'll be drinking at least the recommended eight glasses a day by the end of February. Being well hydrated relieves stress, helps you to sleep better (believe it, it does!), does wonders for your skin and hair and actually gives you more energy and helps you to think more clearly.
Creating files is easy. Just gather like things together, grouping related expenses. This creates categories for your filing system. A category will group the many sub-categories, or parts that make up that category, together. For example you will have the category "Insurance". The sub-categories may be "House", "Contents", "Car", "Health" etc. This keeps all your insurance policies, statements, invoices and other related paperwork together in the one place. When you need to find something related to health insurance you go to the Insurance category and find the sub-category for health - you will have what you need in a matter of seconds, without worrying about where to find it.
This list shows categories and sub-categories for your filing system; adapt them to suit your needs:
Banking:
Personal Account
Emergency Fund
Peace of Mind Account
Day-to-Day Account
Bill Paying System:
Bill Payment Reminder Sheet
Pay Day Bill Payment Planning Sheet
Bill Summary
Daily Spending Record
Monthly Payment Push Planning Sheet
Financial History
Record of Donations/Charitable Contributions
Children:
Childcare
Camps/Excursions
Legal Documents
Medical Expenses
Medical/Immunisation Records
Pre-school Fees
School Fees
Sport
Credit/Store Cards:
Mastercard
Visa
Household Expenses:
Electricity
Gas
Internet
Mobile Phone 1
Mobile Phone 2
Mortgage/Rent
Rates
Phone
Water
Income Records:
Wage/Salary 1
Wage/Salary 2
eBay/Marketplace/Etsy etc. Sales
Insurance:
Car 1
Car 2
Income Protection
House: Building
House: Contents
Medical
Life
Investments:
Savings (Bank)
Shares
Superannuation
Legal:
Child Support
HECS/HELP
Will
Powers of Attorney
Guardianship Papers
Medical:
Bills
Claim forms
Records
Miscellaneous:
Pets
Taxation:
Group Certificates
Receipts
Returns - Wage 1
Returns - Wage 2
Tax Agent Details
Vehicles:
Insurances (Comprehensive, CTP, Third Party)
Loan or Lease agreements
Registration
Organising Your Filing System
This is your filing system so you can handle all the paperwork related to your finances efficiently. Add to or change the categories and sub-categories to suit your situation. We obviously don't keep anything child related anymore, because we don't have children - we have adults and they are responsible for their paperwork, so my filing system doesn't have a Children section - use the categories that apply to you, your family and your household.
You can see above that the categories are in bold. You may have all, some or more in your Financial Filing System, depending on your bills, income, savings and expenditure. Remember, this isn't your Spending Plan, it won't have the same categories. Take one of the folders and put 12 dividers in it. Write the name of one category on the tab of each divider. Label a sheet protector for each sub-category and slip it into the folder behind the category divider.
I like to work alphabetically, it keeps things orderly. This is my way of filing. You may choose to group your information in a different way. The way you file isn't set in cement, choose the way that will work best for you. But just do it! Don't overthink it and procrastinate because it's not perfect - you can make it "perfect" later, the important thing is to get started and get it done.
For example I have all the insurance papers in one file. You may choose to keep the car insurance papers in the Vehicle file and the house papers in the Household file. It doesn't matter how it's done as long as it works for you.
So what happens if, for instance, you have more than one car? Well Vehicles is still the main category. You will create sub-categories for each car, then the minor categories under that. Your file for the cars will look something like this:
Vehicles:
Navara:
Insurances (Comprehensive, CTP, Third Party)
Loan or Lease agreements
Registration
Services
Patrol:
Insurances (Comprehensive, CTP, Third Party)
Loan or Lease agreements
Registration
Services
"Vehicles" is still the major category and the divider will be marked accordingly. Then you'll have a sheet protector labelled for each car (Commodore, Patrol, Ford, My Car, His Car, Car 1, Car 2 or whatever) and file the paperwork for each car in its page protector.
When I need the registration information for the Patrol I go to the Vehicles section of my folder and can see at a glance the Patrol page protector and simply pull out the papers I need. No stress, no frantic searching and absolutely no time wasted.
This is a very simple and easy to use filing system, suitable for most households. There is no need for filing cabinets or expanding files. In fact for most homes having these items encourages hoarding and does nothing to increase the efficiency of the system. If you are tempted to use a filing cabinet or even a file box, think carefully. Re-read the system above and see if it really will work for you. One folder on a shelf or in a cupboard is much easier to use than a filing cabinet stuffed full of papers. It's cheaper too as there is no need for hanging files, manilla folders, fancy tabs and the like either.
Moving Forward
Now that you have created your Financial Filing System you have to use it. Get into the habit of filing regularly. You may choose to do all your filing on a Monday night after dinner or on a Sunday morning, or you may choose to file everything as soon as it comes in. The main thing is to actually do it. An easy way to remember is to only handle each piece of paper once. I personally find this the easiest method - handle paperwork once, as soon as it comes in, file it and it's done, I don't need to think about it again. When a bill comes in, mark it on your payment schedule, record the details, set-up the payment in Internet banking and file it. Done!
Have fun setting up your filing system in your new home office. Then make sure you use it! It really will save you money, save you time and save you energy.
Week 5 Challenge: Drink water!
With the hot, humid weather we have had this summer drinking water should be on everyone's radar. If you are a coffee or soft drink addict, it's time to break that addiction and start drinking water. Not only will you feel better but you'll save a small fortune too. Start by drinking two extra glasses of water a day. You can put a reminder on your phone or on your computer, or you can fill a drink bottle each morning and sit it on the sink or on your desk to remind you. For Christmas a couple of years ago, each of the kids was given a desktop sized water dispenser, that holds 3 litres. Novel, yes, but super effective too. They are all still working from home, so it's right in front of them so when they need a drink, they just pour a drink of water! You are starting small, with just two extra glasses of water, but ideally you'll be drinking at least the recommended eight glasses a day by the end of February. Being well hydrated relieves stress, helps you to sleep better (believe it, it does!), does wonders for your skin and hair and actually gives you more energy and helps you to think more clearly.
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