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Sherry Brown, Professional Organizer

Financial Planning for 2017

The start of the new year presents us with an opportunity for a symbolic fresh start — and’s it’s prime time to make goals and plan for the future.

If you want to incorporate improving your personal finances into your 2017 goals, you’ll want to organize your finances to help you get ahead and make sure things run smoothly throughout the year.

Here are 5 ways to get — and keep — your money in order for the new year:

Create a Budget

You can’t organize your finances if you’re not sure what money comes in and what goes out. A budget is a written spending plan that can help you achieve your goals. It’s a financial fundamental, but it’s too often skipped over (or not stuck with).

Get started by determining what system works best for you. There’s no one right answer here. You can use tools and apps, like Mint.com, or you can set up your own spreadsheets and input things manually.

The type of budget you maintain isn’t as important as simply maintaining it throughout the year. Choose a type of budget and a system that you understand and enjoy working with.

Automate Everything

Working to organize your finances can require a lot of effort to get going, but it gets easier once your financial systems are up and running. A great way to do this is by automating everything you can.

This means automating your bills, automating your savings into targeted savings accounts, automating your investments, and automating your retirement contributions. Most financial institutions will offer this service for free, just ask.

Automation can help you achieve goals faster and also ensure that you are properly saving and managing your finances. A lot of disorganization regarding finances is related to stress, or too many moving parts — but with automation, you can rest assured that your priorities are taking the helm and that you are covering your financial bases.

Focus on High Interest Debt

If you are dealing with credit card debt or any other high interest debt, commit to paying it off as soon as possible. High interest debt can take a large chunk of your budget — and with the interest, it may seem difficult to overcome your balance.

But debt is temporary if you work hard to get rid of it. Find areas you can cut back on in your budget within reason. For example, instead of going out to dinner several times a week, try and reduce this to just one or two times.

In addition, be creative with ways you can earn more money. Earning more might seem obvious, but it can help you eliminate debt more quickly because you don’t have to change your lifestyle to save, and the extra income can go straight to debt until it’s gone.

Getting it over with quickly will help you pay less interest over time. Start by asking for a raise, or turning your skills and hobbies into a way to make some extra cash. By ridding yourself of the weight of debt, you can focus on longer-term goals like retirement and investing — and have more money to spend on your values.

Plan Ahead for Tax Time

A common issue every year is people scrambling to complete their taxes. Many people are left searching through old receipts, statements, and going on an all out scavenger hunt for documentation to do their taxes.

Instead of stressing out, get organized and plan ahead for tax time. Create a folder with your receipts, retirement account balances, investing information, interest accruals, income and expense reports, etc as you receive these documents and papers.

By maintaining a folder year round, you will have the information available to make your tax experience as stress free as possible.

Maintain a Go-To Financial Folder

If you want to successfully organize your finances, you need systems in place to manage everything. But with so many financial accounts, passwords, and paperwork, it can be difficult to keep track of it all.

To help organize your finances, create a financial folder with hard copies of your online passwords, bank statements, W2s, as well as your will.

Having everything in one secure spot makes it easier to access when it’s time to pay bills or do your taxes. The key is to keep the folder updated and organized, so purge documents as necessary.

Staying organized is about creating systems for your success, so that you can live your life the way you want without spending too much time focusing on your finances. After all, you want your finances to work for you, not the other way around.

Parts of this article can be found at http://www.xyplanningnetwork.com/organize-your-finances/

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