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Organizing Your Tax Papers

Wednesday, February 8th, 2012

I have a giveaway today – an Income Tax Organizer, by Smead. More details here. Be the first to comment on this blog post and I’ll send you a brand new, unwrapped tax organizer.

Especially for things we don’t do very often, like taxes, a product which organizes for us can be really useful. When you don’t do something often, isn’t it hard to remember how you did it last time?

The product is is essentially a booklet or a portfolio, with a set of folders inside it and attached to each other – so everything is in one place.

On the inside cover,  you’ll see a checklist, and some blank note space. The checklist is not meant to replace legal, CPA or your tax advisor’s opinions; the particulars of your situation should overrule anything generic. But if you don’t have someone advising you, this is a great way to keep track of what you need. You’ll know throughout the year what to save (or not). And you’ll know, come first quarter of each year (in the U.S.), whether you are done and ready to submit your taxes or need to make a followup call for a missing piece of paper.

Could you make your own organizer – probably. But if you haven’t, maybe it’s because:

  • You only do this once a year – so let’s make a simple system for it;
  • You don’t really want to go through this exercise at all – so let’s make it as easy as possible and spend the least amount of time on it;
  • You can’t find the papers you need – here’s your one spot to start anew this year;
  • You haven’t figure out the right system for you – how about experimenting with this one – it’s a place to start at least;
  • You CAN find your papers – but what about the parent whose taxes you’re doing, or the adult child living with you – this is a great way to have a special place for just their papers, to keep them separate.

 

So – Be the first to comment on this post and I’ll send you a brand new, unwrapped tax organizer!

 

 

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Posted in Financial, Harmony at Home | 13 Comments »

Practicalities of Household Bill Pay System

Thursday, February 2nd, 2012

In part 2, we review the practical aspects of a bill paying system. I hope by now, you’ve answered the questions from my first blog post because they are crucial to setting up YOUR system, which you’ll create and then keep up.

I am not a financial planner or money management coach, so please take this organizational advice and pair it with that of a financial expert. I’ve given you some places to start in the Resources section at the bottom of this post. Some are people; some are software.

My purpose here is the first step – to set up a bill paying process.

#1 Know Your Dates

Incoming: When do you get paid? If self-employed, what’s your average pay weekly?

Outgoing: for each bill, when is it due

Remember: monthly bills are the bulk of this, but also write down quarterly and less frequent bills

If you have any vendors which are on auto pay – where the vendor takes money from your account each month – make sure these are part of the picture; also if any of your bills are already in online banking and on a recurring payment, track those down.

#2 Create the Whole Picture

For most people, mapping these dates onto a blank calendar works well. What you want here is the consolidated picture of all you have to be concerned with. A system needs all its pieces as does a jigsaw puzzle or it won’t work as well.

For Excel or Word: You can also use this form on my colleague Sherrill St Germain’s website. (See ‘cash flow’ forms.)

#3 A Home for Incoming Bills

For paper bills: where do you open the mail? What special container can you use to identify ONLY your bills, to separate out from the rest of the mail? Or in your home office works, too, if you really do manage to put them there right away.

For e-bills or auto pays: So that you remember these as you pay the other bills, make up a paper note or print out the notification you get. Again, you need that consolidated picture.

#4 Paying the Bills

You need a frequency and a method. Frequency, because when you look at your consolidated picture of due dates, you’ll see how often you’ll need to pay or schedule bill payments. Methods for reminders can be: a note on your paper calendar, a reminder on your phone/PDA/PC calendar, or tying bill paying to some habit which already exists. You may want to the reminder to be visible to both of you, so that neither of you is “the nag” to get bills paid; you’re both responsible.

Also consider how often you want to be thinking about bills. Separate the action of writing out or scheduling a bill payment from when it is actually due.,e.g., you can schedule once a month for all dates or you can write bills each week just for that week.

You may want to completely outsource bill paying. A couple of resources are  below, although if you use an accountant for your taxes, start with that person’s recommendation.

#5 Keep/Toss

Know the record retention guidelines from the IRS so that you don’t keep bills longer than you need to. Also consider what makes YOU feel comfortable.

There’s no big need I can think of to make highly organized files for bills you have paid (I keep few bills at all, once paid.) But if you do keep paid bills, consider how often you return to look at a paid bill. That determines the level of organization you need for the “paid” file. Maybe you just need two files: first six months of the year/second; or by year. Maybe you only want to keep the main bills to track your spending.

 #6 Talk about Money

Some people share the bill paying process. It’s emotionally easier to do it together and you discuss your finances in general as you pay. If one of you does the actual bill paying, figure out ways to involve yourself, so you are aware of the state of your financial picture all the time. You can sit alongside,  or review the bills as they come in. You can be the one to track your  expenses in software or on paper, even if you are not doing the one who physically pays the bills.

Resources

Software:

https://www.manilla.com/

https://www.mint.com/

http://www.ehow.com/info_8225611_there-lets-organize-pay-bills.html

 

Experts – People and Blogs/Books

Clearview Financial Solutions – Tessa Glasscock

New Means Financial – Independent Planner – Sherrill St. Germain

Liz Weston, author of my favorite money book – check out or subscribe to her blog.

The Simple Dollar – excellent blog

 

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Posted in Financial, Harmony at Home | 2 Comments »

Reader Question: Organized Household Bill Paying – Part 1

Thursday, February 2nd, 2012

A reader and class participant asks: “Dear Sue:  Do you have any suggestions on how to organize household bill paying? My husband does that now and I would like to come up to speed on it. I would like to find a strategy that suits my style. That way I could take over the bill payment if I had to.”

I’m writing this blog in two parts today. Some of you may want to read this blog and answer the questions for yourself before moving onto the next blog entry, which is about the practicalities of a bill paying system. Some of you, like our reader, already know these answers and will move right onto practicalities. I’m writing and releasing both parts today, so you can read both, or read one, answer the questions, and then return for part two – all at your own pace.

I love this question – Thinking ahead, wanting to understand more now, and aware that any organizing issue needs to take into account your style.

I’m known for answering a question with a question … and then my suggestions, so not to disappoint …

Questions to Ask Yourself as You Begin

#1 Why is this important to you? Our reader has one answer.

Yours might be: I want to know more so we can figure out how to …

  • be excellent role models for our children, teaching them about the value of money, money management, living within our means, or being frugal. This is another “organizing” skill which really is a life skill.
  • stop our magical thinking. You feel as if you’re spending too much, but do you really know?
  • save for (fill in the blank). Understanding and managing the finances of today will help you save for whatever your goals are. And having a goal is the best way to get something done.
  • you have more anxiety around money than you know is healthy. Could be you don’t understand. Could be money attitudes in how you were raised, or that you and your current family have different spending and saving habits. Understanding takes the emotion out of the conversation for the most part. Understanding, managing/control all reduce stress and worry. You’ll know that you have enough for house maintenance or other unexpected expenses.
  • negotiate better rates, use fewer credit cards, pay down debt faster.
  • live the best life we can as we shift into “retirement,” (whatever that means to you).

#2 What systems work well for you – and why?

  • This question will help you get at answers like:
  • How to get started with something new;
  • How to remember what you have to  do;
  • How  to make this a habit and a routine;
  • How do you handle it when life throws you a curve ball or you get super busy?
  • What products or software (tools) do you use in the system that works well for you? What do you like  about them? Why do they work for you?
  • How much control do you have or do you involve other people? How  do you make that work?

Okay, yes, I know that’s more than just a second question! These questions help you figure out what “style” of system work for you.

Once you know that, some of these characteristics can be used in the bill paying system you are now creating. There are three pieces fora system to work: the steps or process you use; the products/tools you use; and the people involved (the habits, their style). All three need to work well for your system to be easy and support your reasons for creating it to begin with.

Next up: the practicalities.

 

 

 

 

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Declutter Your Finances

Wednesday, February 1st, 2012

Thanks to my mom, I have a subscription to More magazine. There’s a wonderfully insightful article this month (Feb 2012). Titled “Declutter Your Finances and Save,” the author writes:”Financial clutter can reach far beyond  not knowing where you’ve stashed important documents. Rather than a messy pile of papers, it’s a mental state that stems from the panic we all feel when the complexity of the modern financial world intersects with the unknown, i.e., with risk.”

So – it’s really not about the papers, is it?

It’s about what you are thinking and feeling when you don’t attack the papers which relate to your financial life.

It’s about the attitudes you grew up with, the messages you heard – spenders, savers, dreamers, risk takers or conservatives, budgeters, or not.

It’s about how you’re feeling with today’s finances… which relates  to how you feel about your future, how you and the one you live manage your short term and long term finances.

It also can be about your confidence level or knowledge of your finances.

I’ve worked with – women mostly – who have shied away from organizing their financial documents and let the papers/online statements pile up. They’ll admit it’s because they really do not understand what the documents are telling them. This is another point the MORE magazine article author makes, that there is HAVING the papers, even organized ! – and there is the separate issue of UNDERSTANDING them.

Please make a point – no matter your age or stage of  life – to organize AND understand your financials and the associated paper and online trails they have.

“Fear always springs from ignorance.” Ralph Waldo Emerson

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Smead Product Review – Viewables

Friday, January 27th, 2012

Smead’s Viewables – I have wanted to  try these file tabs for a long time; they solve a file drawer problem I have. A nice surprise showed up recently – Viewables, from Smead - because Smead occasionally asks professional organizers to review their products. I like them and will stick with them. Here’s the problem I had with my files and how Viewables solves it.

The first picture shows how I see the files from where I sit, with Viewables now making it so much easier to see what I have.

I wanted a solution for this drawer, which holds current, non-client files: my workshops and presentations, two organizing associations, QuickBooks file of receipts, my book, CEU tracking, and in the back, my current personal files. I’m in this drawer a lot when I’m not on the phone with a client or at their home or  office.

The tabs are viewable from any angle, and in a font size larger than average, helpful because I’m not right in front of the files. I have a top-down view plus a front view.

Color code if you want; the software lets you choose font size and color. Very simple software. I didn’t color code for  organizational purposes, but I love having color around me, so each tab has a color.

Very sturdy tabs. The tabs stick up higher than a typical hanging  file tab, but they clear the desk drawer above.  I can’t imagine these wearing out. Plus, you receive a plastic sheet you cover each tab with, for more protection from wear and tear. And plenty of extra tabs and labels.

They’re not as easy to implement as a simple label maker, but that’s okay, for this small, often used set of files – and worth of it because of the angle I sit at, vis a vis the drawer. Otherwise, I’d  have them on a desk stand (visual clutter and distracting) or have  to kneel in front of the drawer each time to see and find my file. Protecting my knees is a good thing, as I get older.

 

View from the front.

 

 

 

 

 

 

Side and top both say the file’s name.

LOVE the top view!

 

 

 

 

 

I’d definitely use these again; they solve the issue of the angle, are very sturdy and are more fun to  implement, too.

If you want to get some files into better shape, this might be a fun excuse to do so!

If you’re not sure how you want organize your files, and would like to collaborate on best ways for you to find what you need, when you need it, please reach out.

It feels good to know that your important  documents at home or your business  files are useful, and that your “paper life” (because we all have some) is in order.

And then, let’s talk about email and pc files…”Organized enough.”

 

Direct link for Smead Viewables: Click here.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Posted in Financial, Home Office, Inside My World, Papers | 2 Comments »

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