Organize Your Financial Life

Prepare now to make life easier down the road.


Managing your finances can feel like putting together a complicated puzzle, but it's easier than you think. Just take the time to set up the right tools and get organized, and the pieces will start falling into place.

Open the right accounts.

Banks offer many incentives to open an account, such as reward points, cash back, and free checks. However, an account that offers reward points may also charge fees. And an account that offers free checking may limit the number of checks you can write each month. Take the time to comparison shop to find the features that are important to you.

A checking account with ATM access is pretty much a necessity, and so is a savings account. Consider linking these two accounts so that you can automatically put a certain amount in savings each month. You'll be amazed at how quickly it will add up.

Be sure to shop around for checking and savings accounts before you decide where to put your money.

What to look for:
  • A checking account that pays interest
  • No or low minimum balance requirements
  • Unlimited free checking
  • Free ATM withdrawals
  • Online and mobile services, such as free bill pay and remote deposits

What to avoid:
  • Monthly fees
  • Fees for insufficient funds
  • Limits on checks, deposits, or ATM withdrawals—and fees if you exceed the limits
Why pay bank fees if you don't have to? Bankrate.com has an easy account comparison tool to help you find the best deal for your situation.

Set up a filing system.


Financial details and paperwork will make more sense to you if you know where everything goes. That means creating a system that works now, so you don't have to think about it later.

Whether you keep paper files or save electronic documents, organizing them by the categories below will help you keep them all straight. Some might not apply to you yet, but you may want to plan ahead.

Bank accounts
  • Checking account statements
  • Savings account statements
Insurance policies
  • Health
  • Car
  • Homeowner's/renter's
  • Life
  • Disability
Debt
  • Credit card statements
  • Car loan statements and paperwork
  • College loan statements and communications
  • Personal loan statements
Personal
  • Birth certificate
  • Marriage certificate
  • Passport
  • Prenuptial agreement
  • Divorce decree
Household
  • Lease (if you rent)
  • Security deposit receipt
  • Rent payment receipts or canceled checks
  • Title or deed to your home (if you own)
  • Final settlement statement (needed when you sell)
  • Mortgage payment receipts
  • Home improvement receipts
Retirement
  • Brokerage account statements (i.e., 401(k), IRA)
  • Annual Social Security statements
Taxes
  • Current year's tax return
  • Tax returns from the past seven years, along with backup receipts for at least the last three years (longer if there are any unusual circumstances)
Investments
  • Taxable brokerage accounts (keep annual statements and trade confirmations)
  • Statements for your children's accounts

Set goals and start tracking your progress toward them.

What do you want from your money—a down payment on a house, a new car, or a comfortable retirement? Take time to think about what's most important to you and what you want your money to achieve.

Once you've determined your goals, write them down. Think of them as a road map to where you want to go—and make them practical and attainable.

Here's a simple two-step approach:

  1. Divide your goals into three categories: short term (less than one year), medium term (one to five years), and long term (more than five years).
  2. Attach a dollar amount to each goal. For instance, a short-term goal might be a vacation. How much will it cost? The more specific you are about your goals, the more motivated you'll be to work toward them.
With your goals in front of you, you can and saving to meet them. Decide how much you can put toward each goal per month. Then use our to help you project how long it will take to reach each goal.

Be sure to track your progress regularly. It can be really gratifying to watch how savings can accumulate toward a goal.




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The information on this website is for educational purposes only. It is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner, or investment manager.

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