Organization is the Key to Financial Success

Organization is the Key to Financial Success

I’ve always loved to organize things. My idea of playing with my kids is sorting their toys into the correct bins, color coding the Legos and setting up new storage systems.

Organization is the Key to Financial Success

I truly believe that there is a correlation between having an organized method of tracking your financial matters and having increased financial success. Those that track and manage their money well have a greater ability to save, invest and grow their wealth.

Being organized with your finances not only includes organizing your financial paperwork and documents, but also having organized systems in place on a regular basis.

Avoiding Debt

Often, debt is the result of not planning ahead for expenses and not having a sufficient emergency fund.

If you implement some sort of organized budget (even a really simple one!), you’ll be able to see whether you have a positive or negative cash flow. This will encourage you to change your spending behaviors to manage your money better and save for the future.

A clear budget will also show you whether or not you can actually afford to buy large ticket items. You should never go into debt to buy things like TV’s or electronics. Homes and cars may be necessary debt for a lot of people, but large monthly debt payments can ruin you financially. A budget will help ensure that you aren’t getting in over your head with these purchases.

Tracking your expenses will allow you to go back over the past several years and see your true expenses. You’ll likely see several categories of high, irregular expenses such as unexpected medical expenses, auto or home repairs. Expect the unexpected. These expenses will occur and you won’t want to rely on a credit card to pay for them when they do.

Maximizing Savings

Losing things makes me absolutely crazy. Because I’m generally pretty organized, I tend to get extremely frustrated when I can’t find things like necessary paperwork or even worse, when I lose cash (I almost never carry it anymore).

Now that I have a digital system for organizing financial paperwork, receipts and other documents my life is so much easier. I also have saved money by doing so. For example, I have a box that sorts my store receipts for the past few months. If I need to return an item to the store, I get a full refund on my purchase. Reimbursements are never an issue either.

I also have a system for tracking my tax deductible personal, rental and business items. This ensures that I am able to deduct all my expenses that I’m entitled to and I don’t forget about any along the way (or have to scramble at the last minute to figure out my taxes!). As a result, my tax liability is lower than if I wasn’t organized with my finances.

The biggest impact on my savings, though, has come from automating my investments. I set up automatic transfers from my main checking account to 529 plans, brokerage account, and my Roth IRA and never have to think twice. I definitely save more this way!

Reducing Expenses

By staying on top of my budget on a weekly basis, I have a really good handle on my total expenses and can easily determine at the end of each month (and quarter and year) whether there are any changes I need to make to align with my true values.

Sometimes, it means actually spending more on certain categories (hello, self-care!), but usually it’s a situation where I’m spending too much (eating out generally!).By regularly tracking and being able to see how my overspending is affecting my savings goals, my organized system helps me to course correct my money habits.

I also have a running to-do list for financial matters. A couple of items currently on my list include getting updated insurance quotes and canceling cable. I’m always looking for ways to save money!

Final Thoughts

Ultimately, my motivation to keep my finances organized comes down to one thing. My financial goals. It’s important to me to save for my kid’s college expenses. I want to keep up my standard of living in retirement. I also want to be financially free to be able to give time and money to charitable causes that I believe in.

Life has taught me that you make time for anything that’s truly a priority in your life. I’ve found that making the time to implement organized financial systems has actually saved me time as well as money. It’s a win-win!


2 Responses

  1. I love this “organizing” angle. Budgeting (and other things you mentioned) really is about organizing your spending/cash-flow. I hadn’t thought about it from this specific angle but organizing really is key!



I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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