Financial Fridays: Some Organizing Tips

Today I wanted to go over a few simple organization tips to help with keeping track of bills/debts/and other obligations.

The first step is choosing what format you want to use to keep these records. I recommend using Excel or something similar. Some of you may prefer to use plain old paper and pencil. Still others might like to use wall and crayon--whatever works for you.

If you are unfamiliar with Excel, check out these simple tutorials. (Thanks John)

Make a list of all of your monthly bill and debt obligations and put them in the order in which they are due. If there is something that you want to put money towards on a weekly basis, I suggest putting this at the top of the list. For example, those of you making regular charitable contributions, put that at the top. Don't forget to include your house savings amount here at the top! I also include a weekly grocery amount here.

Now that you've got a nice list going (or maybe it's more of a daunting list than a nice one), make a column where you can put the full balance of all your debts. For regular bills that don't carry a balance, such as rent or other utilities, you can just put $0.

Next to that column, make another column where you can list the payments that you plan to make towards each of these. For most utility-type payments this will just be the full amount due. On larger debts you can choose an amount to pay, anywhere between the minimum payment and the full balance. (Make sure to add a row at the end for the totals. It's important to know your expected monthly obligations).

Two more important columns to add are the "minimum payment" and "annual percentage rate" columns. These apply to any debts you may have. Keeping track of these things will be an important debt reduction technique which we will discuss another time.

Of course, make a column for the due dates.

The most important column on this page is the one that shows how much money you have put toward the bills. I call this the "Current Funds" column. In this column you will divide up the money you earn as it comes in. For example, if today is the 31st of the month, and you are getting paid today, here is what you would do: First subtract out of your paycheck any "per paycheck" deductions that you may have (hopefully your house savings is among these). Then simply start with the bills due on the 1st and apply your paycheck to each one until the paycheck is exhausted (make sure that YOU don't get exhausted before your PAYCHECK does!). You'll do the same with the next paycheck, and so on.

I also have a column for check marks. I check off when the payment amount is acquired and when the payment has been completed.

This system may not be for you, but it has worked wonderfully for me. If it is confusing at first, just tweak it around until it makes sense to you. Please direct any questions to me personally or in the comments. Good luck!