Money at 30: When it Pays to Be Organized
My wife may be the most organized person I know. On the off chance that I need to know how many miles were on our car when we took it in for an oil change three years ago, I guarantee she’ll have an answer for me in less than 10 minutes. This might seem kind of silly but the truth is that organization actually plays a huge role in personal finance.
Here are a few examples that prove it pays to be organized:
Managing due dates
I have a terrible memory. Back when I was a manager at the movie theatre, I used to tell my bosses that, if I wasn’t writing down what they said, there was almost no chance I’d remember to do what they asked. Naturally I’d then forget to look at what I wrote down, but I digress — the point is that billing due dates can sometimes slip your mind and cause you financial pain.
There are few different ways to make sure you’re on top of your due dates, starting with the setting up autopay. The vast majority of creditors now allow you to pay your bill automatically and may even offer you a discount for doing so. Of course there are downsides to this tactic (as you’ll see below) and there are some holdouts for such a service. For those cases, I’d recommend checking out a personal finance app like Mint or Clarity Money that can help you add your billing due dates to your phone’s calendar. If you have a real life, physical calendar as well, it can’t hurt writing some of your major bills like credit card due dates on there as well.
Knowing what you’re spending
As I mentioned there are some downsides to automation. Topping that list is the fact that you can often overlook expenses like unneeded memberships or overlarge utility bills that actually require your attention. This is where the aforementioned apps can also come to the rescue. In fact Clarity Money even has a feature to help you cancel memberships on the spot!
Beyond fancy apps, it’s imperative that you perform regular audits on your finances as well. Every three months are so, take another look at all of your bills and total up your spending. Not only will this will give you an opportunity to trim any fat in your budget but, considering all the recent cyber attack news, will also give you the perfect opportunity to ensure your charges are on the up and up.
Collecting tax write-offs
Being self-employed, my personal finances are also my business finances. Because of this it’s important that I keep track of the spending I do for my career as these purchases can often lead to tax write-offs and credits (as I learned from my tax experience last year). However it’s not just freelancers who can get tax write-offs — there are plenty of deductions from medical costs to moving expenses that may apply to you, but you’ll need to be organized in order to get them. I’d recommend maintaining a file with all potentially relevant paperwork, receipts, and other documentation so you can revisit these purchases at tax time and see if you’re entitled to a deduction. Also be sure to hold onto that documentation after submitting your return just in case you end up facing a dreaded audit.
Claiming insurance money
Finally another area of personal finance where it pays to be organized is when it comes to filing a claim on your insurance. For example, for homeowners or renters insurance policies, it can be extremely helpful to take photos of all of your home and possessions ahead of time so you can better show what was lost, damaged, or stolen. These before and after photos could make a big difference in proving your claim and getting all of the money you’re entitled to.
In many aspects of personal finance, being organized is a must. Your organization could even save or make you money if you play your cards right. By staying on top of your bills and spending, while also being prepared for tax time and any insurance claims you may need to make, you’ll be a step ahead of your finances.