An essential step to reaching a healthy financial state is to keep your finances organized. I’m often asked for tips to help people organize their finances. Here are a few tips to help keep your finances organized after you have assessed your financial health and established a budget.

See related post: Assessing your financial health

Write down specific financial goals.

Every December, one of our family traditions is to meet to review the year in number. We assess the progress made compared to the financial objectives set at the beginning of the year and discuss our future plans. In preparation for our annual meeting, my husband and I each write down 3 to 5 goals we would like to focus on in the next year and the next five years. The goals range from investing in areas we are interested in, potential house projects, donating money, planning a big vacation, or any other interests requiring financing. We also take that opportunity to estimate the cost for each project. After discussing numbers, we agree and write down five specific objectives to pursue for the year and include them in the yearly budget. We begin the new year’s budget with those financial objectives.

Track and review financial plans

Once you have established a plan for your finances, it is essential to regularly track how well you are doing compared to the plan. Applications like Mint or You Need a Budget can help you track expenses; Google Sheets and Excel can also help you with that task. The most important thing is to review your expenses regularly. I like to review expenses every week because it helps adjust spending for the rest of the month and year if necessary to ensure that spending stays within the monthly objectives. Our family also has a budget review meeting once a month to look at overall spending and discuss upcoming big-ticket expenses for the year. It also allows us to track investments and adjust plans if needed. This budget meeting helps us stay focused on our objectives and stay aligned when it comes to our expenses and long-term plans. Seeing the progress we are making also helps stay motivated and understand what we should do to stay on the right track to meet specific financial goals.

Related post: The 50/30/30 Budgeting Method

Curve impulse buying

Sometimes, we can be tempted to make purchases fit in the budget simply because we can afford to. Those purchases don’t always give us the pleasure we anticipated or help enhance our lives. With Amazon and other companies that allow us to buy items with a couple of clicks, it’s easy to make impulse buys. Sometimes, if you take the time to look at all of those small ticket impulse purchases you made, they add up to a significant amount of money.
I’m an Amazon prime customer. It is very convenient to make purchases without leaving the house, knowing they will be delivered within two days without paying extra for shipping. Based on prior purchases, the website will showcase similar items to encourage you to keep purchasing. Though I do a pretty good job at ignoring it most of the time, I catch myself adding things to my cart every now and then. I curve impulse purchases when that happens by letting items sit in my cart for a few days, sometimes even a week. When I come back days later, I often realize that I’m not as interested in the items anymore and remove them from my cart.

Budget for large ticket items

Planning for things such as car or house repairs, Christmas or birthday presents, trips, or charitable donations is a great way to keep your finances in order. I like to include those expenses in the yearly budget and make adjustments throughout the year as long as they fit in the overall budget for that year. Also, I like to include a miscellaneous expense line on the budget for unexpected expenses. It helps cover the necessary costs that we did not anticipate. It can also help keep your financial plans in order, and give you an extra layer, so you don’t have to touch your emergency fund unless necessary.

Related post: Building an emergency fund

Have multiple savings account and name them.

Having multiple savings account helps tie your savings to specific goals. Keeping separate accounts for long-term and short-term goals and naming those accounts can help ensure you stay on track.

In addition to keeping your emergency fund in a separate money account, you can also have one or more short-term saving account(s). You can use those accounts to set funds aside for upcoming expenses such as yearly subscriptions, trips, repairs, or any other expense you expect to incur in the short run. You can also transfer any money that you expect to contribute to an after-tax investment account outside of your regular checking, or long-term savings account into a savings accrual account until you are ready to invest. Having multiple savings accounts can help ensure that you meet your short and long-term savings and investment targets.

Automate saving and recurring expenses

As adults, we have a lot on our plate, whether it relates to tasks to continue to deliver at work, maintaining our home, or being a parent. Automating savings and expenses can help us meet our savings goals and manage our bills more efficiently. I like to automate savings to transfer them to a separate account and ensure that targets are met. Also, although I believe in reviewing bills every month to ensure that they are reasonable, I also like to make life easier by automatic a few expenses. Automating payment for expenses that are pretty consistent every month, such as the internet or phone bills or daycare expenses, can minimize the amount of time you focus on managing bills.

Related post: Achieving financial independence

Being able to earn money, whether by climbing the corporate ladder, having a business, or investing, is not enough to build long term wealth. You also need to have a plan for your finances and stay organized to ensure that you continue to move in the right direction. What are some of the methods you use to stay organized when it comes to your finances?

“When money realizes that it is in good hands, it wants to stay and multiply those hands.” Idowu Koyenikan