The best financial organizer is that one that works.
I’m fond of saying that I’d rather be useful than brilliant. Meaning, I’m way more effective at getting my message across when I’m honest and vulnerable, versus when I’m using a bunch of jargon to make myself sound smart. Some may say that’s just an excuse because I’m not brilliant; you’ll have to be the judge of that.
There are a lot of ways to keep your financial life organized. Some are simple, and some are complicated. The best one for you is the one that works, meaning you actually use it. I’m going to talk about four methods which can help you get your finances organized.
Over the course of my 20+ years as a financial advisor, technology has brought a lot of cool solutions to the marketplace. Are they right for you? Maybe. My goal is to make you aware of what’s available. Finally, I’m honored to be named to Investopedia’s list of the top 100 financial advisors many years running.
Here’s what we’ll cover:
- What is a financial organizer
- Physical containers
- Software programs
- Virtual containers
Let’s get started.
What is a financial organizer
Like beauty, it’s in the eye of the beholder. You may not feel organized unless you’ve got a full financial plan contained in a leather-bound book. You might consider online banking to be your financial organizer. You could have all your accounts with one financial institution and have a dashboard where you can view everything.
Many of us have a financial junk drawer. It’s a lot like our other junk drawer. A place where things get put that don’t fit neatly anywhere else. The final resting place when we’ve got something and we can’t remember why we bought it, but we’re not sure if we should get rid of it.
When it comes to our finances, we piecemeal our planning. We’ve got old IRAs and 401(k)s, life insurance policies and 529 plans. As we move through life, we collect new financial tools and accounts based on the need of the day. The result? A mishmash of financial services. The solution? A financial organizer.
Here are four methods for cleaning out your financial junk drawer.
Your organizer needn’t be complicated. When I started my career, I’d give my clients a portable file box they could easily transport. While I’m sure these were occasionally repurposed, they served their intended purpose most of the time.
Should you choose this route, you’ll simply need some hanging folders and you’re off and running. I recommend segmenting yours into these categories:
- Financial goals and objectives (Your financial plan if you have one)
- Insurance policies
- Investment accounts
- Estate planning documents
- Tax documents
- Real estate documents
- Business documents
While I’d give my clients the portable file box, I’d always recommend they purchase a fire safe as well. Along with your important financial documents, it’s also wise to store your passports, birth certificates, Social Security cards, and other important documents there.
Before I go any further, you can most certainly utilize a combination of some, or all, of the organizational tools I’m going to talk about. Again, it’s what works for you.
Even if you decide to use a physical organizer, I also recommend the use of a spreadsheet. You can create an Excel document, or a Google drive doc for free. If you’d like a pre-made version, you can download our Personal Financial Statement for free.
If you’d like to customize your spreadsheet, and have them link directly to online accounts, check out Tiller Money. For a small fee, they give you the ability to easily create the spreadsheet of your dreams (or at least one that works for you).
You don’t need to be a tech genius to figure out how to use a spreadsheet and to keep it in the cloud. God forbid, should you ever lose track of your physical documents, you’ll have online access.
If you are a more tech-interested person, there are a lot of great tools to get your finances organized.
Mint is the most downloaded personal finance app out there. That doesn’t mean you’re going to like or use it, but many people do.
I’m a big fan of OnTrajectory. If you are someone who wants to take a more DIY approach to your finances, this is a tool worth checking out. You’ll be able to put numbers behind your goals and objectives like saving for a down-payment, debt repayment, and retirement.
Finally, check out Trustworthy. Their tagline is “the family operating system,” and I think that’s pretty accurate. It brings the best of a physical organizer together with everything you want from a virtual system.
There are pre-made sections for all the traditional categories, and you’ve got the ability to customize it as well. You can also set up reminders so you don’t forget any important or time sensitive tasks.
It also gives you the opportunity to invite others to collaborate and to view certain sections of your system. For example, you may have charitable desires as a family, so you want your kids to have access to that part of your system. Trustworthy can be a great tool for having proactive conversations around money that are sometimes difficult for us.
Making it real
Like I said at the beginning, it’s better to be useful than brilliant. If you find you’re not using the complicated system you started with, find something that works for you.
It’s essential to pay attention to your finances, and to track your progress. A good financial organizer can help you do that.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
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