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Organising your
finances can be a real chore. Every month, you receive several bills,
statements, and other financial documents, which can be quite
overwhelming. Unpaid bills and statements from multiple bank accounts
lying unopened are a sure sign that you are losing control of your
financial life.

Perhaps, you
regularly miss payment deadlines and end up having to pay penalty fees
or punitive interest because you just can’t keep up with all your
financial matters. You could be putting your financial wellbeing at
risk.

Just as you would
attempt to de-clutter your home by throwing out all the things you no
longer need, your finances need an overhaul from time to time. If you
are disorganised, it will be difficult for you to be in control.

Ask yourself these
questions: is your home insured? When is your health insurance policy
due for renewal? What kind of policy do you have? When is your next
rent due? Is the landlord willing to renew at the old rate?

Most of us badly
need to go through this exercise, so this December, let us together go
through all our financial matters and try to create some order ahead of
2011. This might seem like a daunting task; where do you start, with
envelopes, drawers, and cupboards full to the brim and overflowing with
documents that you haven’t looked at for years. If you put your mind to
it and devote some time to this task, you will make huge strides in
sorting things out.

What tools do you need?

To get started, you
need to put a few things in place. Your purchase list could include the
following items: files and folders, A4 envelopes, a letter opener,
stapler, a paper punch, markers, biros and pencils, address labels, a
calculator, a shredder, and even a small safe.

Create a simple filing system

To put your
documents in order, you need to carefully create a system that helps
you to keep track of all the paperwork. A simple filing system is one
way, as there is a lot of important financial information that needs to
be organised and maintained.

The categories
usually include the following documents: bank statements, retirement
account, other investment statements, brokerage and mutual fund
statements, portfolio reports, insurance policies including those for
your home, life, medical and health insurance, title documents for your
home and your car, tax returns, mortgage documents, tax returns,
monthly bills, salary pay slips, warranties, title documents for home,
car, receipts for significant items, and so on.

Sensitive documents

We all have some
particularly important personal documents such as a passport, birth
certificates, title documents, stock certificates, educational
certificates or your marriage certificate; scan or photocopy these
documents for your household files.

Ideally, the
original documents should be stored in a sturdy fireproof filing
cabinet or a small fireproof safe. List all the contents and make
copies to be kept with your lawyer or other reliable family member or
friend. It is important to protect these from the risk of fire, flood,
or other disasters.

You don’t need to
go overboard in trying to create a military fortress at home, but at
the same time you shouldn’t have things lying around in cardboard boxes
at the bottom of your wardrobe for the wrong house keeper to rifle
through whilst you are at work.

Regular Maintenance

Setting up a basic
filing system is one thing, but maintaining it is another. Even if you
are too busy to go over your money matters once a week, do try to
revisit this most important aspect of your life periodically. Whenever
you receive a bank statement, take a moment to check it for errors
before you put away in the correctly labeled folder. That way, your
bills and important documents are easily accessible.

Too many bank accounts?

How many bank
accounts do you have and how many do you actually need and use
regularly? If you have more than two bank accounts, you might consider
closing down the ones you don’t really use unless the accounts play
very specific roles.

Deal with bills promptly

If you receive a
new bill, deal with it promptly. If you subscribe to internet banking,
it will be easy to automate some of your regular utility bill payments.
Otherwise, write a cheque and send it off immediately. Do not
procrastinate; start this task and finish it straightaway so that it
takes only a few minutes of your time.

Shred! Shred! Shred!

Many Nigerians find
themselves victims of fraud and identity theft, in which personal
documents are stolen and the data is used fraudulently. Your financial
information is very personal, and it is essential that you maintain
confidentiality to protect yourself from fraud. When your rubbish is
picked up, you don’t know exactly where it ends up.

Don’t just
carelessly discard old financial statements; all those old bills, bank
statements can become prime targets for thieves. Consider buying a
shredder so that you can immediately shred any sensitive documents that
you no longer need. This way, you can minimise the chances of the wrong
person getting at the information.

These are just
suggestions; it is important to devise a system that works for you,
otherwise you will not follow it through. Using technology to organise
your finances will make things even quicker and easier.

Often, we don’t appreciate the importance of keeping our finances
organised until we are faced with a major financial decision such as
buying a home, applying for a car loan, or trying to claim on our
insurance policy.