Financial problems start to arise for a variety of reasons – such as overspending and not planning for expenses – and although any one of these issues may seem to be the cause of someone’s financial challenges, all too often the root problem lies with not knowing how to organize your finances.
The simple truth is that many Canadians haven’t taken the time to get their financial house in order. If you can’t find your credit card bills, you won’t know when your payments are due, and if you have old debts you’ve long forgotten about, your credit score could take a turn for the worse.
If you’ve often asked yourself “how can I organize my finances?” you need not look any further. Here are five simple things you can do to establish some financial order.
Keep All Your Financial Paperwork in The Same Place
Organizing your finances is much easier than most people think, and the first step to establishing order is to create some sort of filing system. Something as simple as a banker’s box with a bunch of folders, an accordion file folder, or even a filing cabinet works great.
As you receive your bills, statements and contracts, file the paperwork in the appropriate folder after you’ve looked through them. So the next time you need a statement or a bill, you’ll know where to look and it’ll take you no longer than a few minutes to find exactly what you’re looking for.
Once you organize your financial paperwork, your bills and statements won’t go missing and you’ll be in a better position to stay on top of your payments.
Check Your Statements For Inaccuracies
Unfortunately credit card fraud and identity theft are becoming prevalent these days, and it’s for this reason that you should go through each of your statements carefully before filing them away. When you’re going through your statements, be on the lookout for any signs of fraudulent activity.
If unauthorized purchases appear on your credit card statement, call your credit card company immediately to dispute the purchase. Reporting the unauthorized charges sooner rather than later will allow the credit card company to investigate the purchases, and it will also put you in a better position to have those charged reversed.
On the other hand, if those unauthorized purchases go unnoticed and you don’t report them within a grace period, your credit card company will assume you are accepting responsibility for those purchases, and they will hold you liable for payment. If you choose not to make a payment this will reflect negatively on your credit score. Yet it also doesn’t make sense to pay for something you never purchased.
To prevent this from happening, check your statements carefully when you receive them, and make sure you report any suspicious activity to your credit card company promptly.
Mark the Due Dates For All Your Payments
Once you’ve organized your bills and you know which creditors to pay, the next step is to set up money reminders for yourself so you’ll always stay on top of your payments. The easiest way to do this is to make a checklist for all the bills you’re expecting, accompanied by their payment dates.
Then using an agenda, a wall calendar, a smartphone app, or a Google Calendar notification, mark (or set up an alert for) two things: 1) A reminder to pay an upcoming bill payment, set at least two weeks ahead of the due date; and 2) The actual payment due date. Whether you decide to use a traditional calendar or a more tech-savvy application, they will serve the same function: it’ll help you remember where your money needs to go, and on what date, so you’ll never make a late payment again
Another option that can help streamline the bill-paying process even more is to set up automated bill payments through online banking. You can automate payments and transfers, so a predetermined payment amount gets made on a set day. This way, you won’t have to worry about missing a payment.
Update Your Contact Information With Your Financial Institution
Your mailing address and phone number are the main lines of communication between you and your financial institution, and if your creditors and banks do not have your correct information on file, they will not be able to inform you of any changes or activity taking place on your account. And, this could leave you with some unexpected – and unwelcome – surprises.
For example, if your financial institution mails out a notice regarding a new fee structure but you forgot to update your mailing address, you won’t be aware of the new fee getting charged to your account each month. Or, if your credit card has been compromised and the credit card company calls your outdated phone number with the intention of informing you of a hold they’ve put on your card as a safety precaution, you’ll be in for a rude awakening when your card suddenly gets declined when you’re trying to make a purchase.
When you move or change phone numbers it’s important that you provide your bank and creditors with your new information. Otherwise, you’ll be left in the dark about the changes and activities taking place with your personal finances.
Communicate With Your Creditors
If your financial situation changes and you find yourself unable to keep up with your debt payments, it’s essential that you talk to your creditors the soonest you can. More often than not, your creditors will be willing to negotiate a payment arrangement to help you ease your debt repayments, and they may be able to suggest ways to improve your situation before you end up in a tight spot. If you don't let your creditors know about your financial situation, they won't be able to help you and you'll end up falling behind on your payments and digging yourself deeper in debt.
Before you contact your creditors, work out a budget that shows clearly how much you are able to realistically pay before your situation improves. Often, creditors are open to negotiation because their ultimate goal is to recover the money you owe them. However, if your creditor isn’t able to help you ease your debt repayments, another option is to make an appointment to meet with an accredited, non-profit credit counsellor. They’ll go through your finances, help you with budgeting, and present all the options available to you so you can get your finances back on track.
Getting Organized is Easier Than You Think
Financial disorganization is often the root cause of most financial problems, and the good news is, organizing your finances isn’t as hard as you might think. Once you get your finances in order, not only will you stay on top of your payments and improve your financial situation, but you’ll feel happier as well. Money matters won’t bring on much stress and anxiety anymore, which means you’ll have more time to focus on things that bring you joy.