I woke up this morning feeling stressed. My home computer is misbehaving so even when I’m able to steal a few minutes to work, it’s not terribly productive. When things start to go wrong, I begin to worry. When I begin to worry, I need a plan to bail me out. I guess that’s why budgets work so well for me. My three main lines of defense against chaos are my budget, my calendar and my to-do list. Without fail, if I stray from any or all of them, I begin to feel as if I am spiraling out of control.
Searching for Anna
Because I am beginning to feel like I’m losing my grip, I think I might just sneak out today and get myself a new calendar. Even with all of the great tech gadgets available, there is something about a paper calendar that I find appealing. I’m going to get myself something inexpensive but pretty that even has room for my to-do list so I won’t have sticky notes everywhere as I do now. I tend to manage time in one-week bites, so a weekly format would be best for me. Hmmm . . . given that time, money and task management are my greatest challenges, maybe I’ll even look for something that incorporates all three. Wouldn’t that be something? Yep, I think that is what will bring me out of this funk. I’m going to slip out today and get myself a little organizing assistant. I think I’ll call her Anna. She will keep me on time and on budget and I won’t commit to anything without consulting with her first. If she can do all of that, she will be worth her weight in gold so even if she costs me $20 or $30, I think it will be money well spent.
New Year’s Resolution #2: Tackle My RPOC
I’ve noticed that the first step to conquering anything is often just getting organized – whether that means organizing your thoughts or your papers. With money management, it is essential to have some sort of organizational system. I actually have one, but when I get busy, even my well-planned strategy is reduced to a/n RPOC (random piles of crap) system. That’s OK if you allow yourself the time to sift through the RPOC periodically to purge and organize. That’s what I’ll do next week – with Anna’s help. I’ll block out some time to pull all of my RPOCs together in one spot and organize them. First, I’ll separate work stuff from personal stuff and kid stuff. The work stuff will go to my office where I actually have a separate file cabinet for each of my work priorities. The personal stuff will get filed away in the appropriate places in my two home filing cabinets and I’ll purge the old stuff and the junk.
Financial Organizing Tips
If you are thinking about doing some filing of your own to get ready for 2011, here are some things to think about. At a minimum, you should have a basic filing system for your financial records.
What to File
The basic types of financial records that you should keep track of are:
1) Income – these records document your wages, dividends, interest and partnership or S corporation distributions.
2) Expenses – here you should hold on to records that would allow you to prove expenses for which you can claim a deduction or credit on your tax return. This includes alimony, charitable contributions, mortgage interest, real estate taxes and childcare expenses.
3) Property – make sure you keep up with your purchase price and the cost of any improvements you make on your home. This will help you to determine if you have a gain or a loss when you sell. Also be sure to retain records o settlement or closing costs, casualty losses and any insurance reimbursements for those losses.
4) Taxes – keep copies of your completed tax returns and all of your supporting documentation.
Where to File
You might also want to consider the following:
• Store hard to replace items like legal documents in a safe deposit box at a financial institution;
• Store frequently accessed items like a hard copy of your budget and bills to be paid in an ‘active file’ which could be an accordion file or small box.
• Store less frequently accessed items like warranties and receipts for major purchases in a ‘permanent file’ which may be a locking file cabinet tucked away in a closet.
• Be sure to shred all financial papers to guard against identity theft. Just make sure to keep little fingers away from those shredders!
How Long to Retain Your Files
As far as how long to hold on to your records, you should generally keep records of assets (property and other major purchases) for as long as you own the asset. Most income and expense records need only be kept for about a year and then including in your tax file as supporting documentation. In the US, tax records should be kept for three to six years depending upon if it might be possible that you have underreported your income.
A Little Peace of Mind
No matter how you organize yourself, the value in being organized is that you can rest assured that when you need to put your hand on a piece of information, you can do it quickly and easily. I think I’ll run out and find my Anna now so that I can spend less time worrying about what I’m forgetting or can’t find and more time living in the moment. I wish you all the same level of peace!