Patrick over at Cash Money Life is running a contest to encourage formation of financial goals for the next year. In order to set a goal that has a hope of being met, he's asked that everyone use the SMART mnemonic to make sure that our goals are: specific, measurable, achievable, relevant and time-bound.
My most pressing financial goals really are organizational goals. I have accounts at several different brokerage houses and banks. I use several online-only banks and financial institutions (i.e. Paypal). Do I know where all my money is? No! could I find out if I really had to? Yes, but...
Ah, that but. See, here's my goal. By the end of 2008, I want to have fully implemented a financial organization system. This might just be a Word table, an Excel sheet or even a Notepad file. It might involve using one of the newer online services, like Mint or Wesabe. It might just be a notebook filled with information. The means isn't as important as that it gets done.
To do this, starting in January of 2008, I'll gather the information from each bill and statement that comes in through paper mail. In February, I'll tackle those that come via email. In March, I'll seek out the ones with no statements at all (i.e. Paypal, which only sends me information if I use it). Thus, by the end of March 2008, I should have a clear picture of how much I have, how much I owe and where I hold and spend my money. I'll be able to make changes to my portfolio based on actual information rather than on what looks good in the financial section of the newspaper. And, I'll better be able to track expenses.
There's another component to financial organization and that's the brutal reality of all the paperwork that we get. I have two Rubbermaid bins full of several years' worth of bill stubs, check registers, bank statements, and what have you. Why aren't they filed neatly? Well, that's a good question. If you've peeked at my other blog, you'll know that I'm a hoarder. I love stuff, and I hate letting go of things. But I also despise disorder and clutter. Ironic, eh? In the past, when I tried to set up a financial organization system, I would try to make it perfect. Everything in chronological order, alphabetized...you get the picture. Guess how much of my filing I got done? Yeah, not much. In fact, I have two large Rubbermaid bins full of unfiled, unorganized paperwork. Why? Because my system was too labor-intensive. I just couldn't keep up.
My new system will involve a simple rack for my desk, those manila file folders, and a file tray. After a bill is paid or a statement opened, it will go into the file tray. Once a week, I'll take what is in the tray and sort it into its appropriate folder. Once a folder is full, it will go into the file cabinet and a new one will take its place.
The true test of how this all works will be at tax time. I'll update you then!