Organization! Some of you may hear the word organize and your heart flutters with excitement, while others are probably filled with dread just by the sound of the word. Wherever you are on the spectrum, you can and NEED to get your finances organized.
STEP 1: Understand Why You Are Doing This In The First Place
Here are some reasons to get organized financially:
Control: It is hard for the finances to run out of control when you are focusing this intently on your financial affairs.
Improved financial focus: We tend to improve that which we focus our attention on.
We WILL die someday: Our family will appreciate a clearly organized set of financial affairs.
step 2: Prepare A List Of All Of Your Financial Accounts
It is important to gather together your financial statements so you can easily prepare a one or two page document that details your entire financial picture.
step 3: Information To Include On Your Financial Accounts Form
This form is meant to be the be-all to end-all location for your entire financial picture. When you are looking for key financial information, you won’t have to go far because it is all contained within this file. When you pass away, it allows your estate executor to easily understand what they are dealing with.
Here are the key items to include:
Investment Accounts
Bank Accounts
Real Estate
Will
Power of Attorney
Insurance Policies
Jewelry or other valuables
Safe Deposit Box
Step 4: Make Sure You Are Budgeting
Having your accounts listed out and your financial affairs in order is so important. What good does that do you though if you aren’t organized with the money that you spend? Budgeting is part of being organized with the money that comes in and what goes out of your account each month. Taking control of this sets you up for financial success.
STEP 5: Where To Find Free Or Cheap Resources
Check your local hospital for free healthcare power of attorney forms.
Check your local hospital system’s website to see if they have the same available. They may also offer advanced directives. An advanced directives form takes the pressure off of your loved ones to make care decisions for you if you aren’t able to communicate your desires yourself.
Some county library websites will also offer free legal forms, including those that are state-specific.
As you organize your accounts and records not only will it help your loved ones in the long run, but it will become easier for you to understand your current financial position. This will help you as you make monthly decisions in your budget and set you up for success with your finances.
This may be a time consuming task your first go round, but after you have this set up it will be easy to update and maintain it going forward.