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How Can I Stay Financially Organized?

June 27, 2021
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Organization is something that is not often talked about in conversations surrounding financial wellness, but we believe that it deserves to be a part of the discussion. If your finances are not organized, it can quickly lead to extra expenses, deficient savings, and money that isn’t working for your best interest—which are all things we advise our clients to avoid.

Organizing your financial life may seem like a large undertaking, but once you invest the time to get things tidied, it will be much easier to maintain your system and tell exactly where every dollar goes. Taking control of your finances and assigning a job to every dollar will help you reach both your short- and long-term financial goals, and we have the tips for how to do it below.

Tips for Organizing Your Financial Life

Create a Stand Alone Savings Account

If one of your financial goals is to save more money, having a savings account is a must—especially if it’s an account that’s fully separated from your personal checking account. A stand alone savings account allows you to fully separate your saved finances from your checking account, which likely fluctuates in balance throughout the month. You can always transfer the money to your checking account in case of a sudden emergency, but by keeping your savings in a different place, you can ensure that unless you really need it, your savings stays right where it needs to be.


Protect Yourself Against Major Cash Casualties

Just as important as earning money and saving what you’re able to is protecting the funds that you already have. Life is nothing if not uncertain, and there are many emergency scenarios that can quickly drain away everything you’ve worked for. Part of good financial organization is protecting yourself against things that could deplete your savings and leave you or your loved ones in a bind. Work with a financial advisor to make sure you’re protected against common “cash casualties” such as lawsuits, sudden health issues, or death.


Pay Off Debt in the Correct Order

In the financial industry, we break debts into two categories: good and bad. An example of bad debt would be anything that doesn’t build equity and carries a high interest rate, such as credit cards or personal loans. Good debt, however, would be anything that will build wealth long term, such as student loans or a mortgage. If you carry multiple types of debt, paying them off in the correct order will maximize your money’s capabilities. Begin by prioritizing bad debt with high interest to start with. For good debt, such as a mortgage, continue to make your assigned payment each month until you are in a solid place with your savings (we recommend about a year’s salary), then begin allocating more money to these payments as well as other investments that grow your net worth.


Budget When Necessary to Keep a Level Spending Habit

Once you invest the time into financial organization, you will likely find that budgeting down to the penny each month is no longer necessary to keep you in good financial health—which is exactly what we want to see! However, doing periodic check-ins with your finances is a great practice so you can be certain you are keeping your spending habits in check. Every few months, we recommend doing an audit so you can be certain you aren’t overspending or accidentally blowing your budget on unnecessary costs.


If you need help getting your finances organized, that is exactly what we’re here for! Contact us today to learn more about how we can help you get all your financial considerations in order.