Making Your Money Matter - Setting up digital financial binders

Setting up Digital Financial Binders

Setting up digital financial binders, a system to organize all your financial information paperlessly!

If you’re just stopping by for the first time, this post is the part of getting organized to get ready for a series of classes over the next few months which will culminate in the development of a complete financial plan.  Stop by the orientation class HERE first for the orientation class/course overviews and HERE for more information about the website.

We talked about setting up two financial binders already, but many people (including me), like to access their files electronically as well.  When I first starting working in public accounting as an intern, the office had just recently started implementing new paperless office procedures to review, file and store all tax returns and client tax documentation electronically.  There are so many benefits to this, especially when working with changing versions of files and stacks of papers (think about how many boxes you have filled with paper!).  I am still working on getting up the motivation (and finding the time) to scan all those papers and get rid of most of those boxes from my home forever, but I have seen so many advantages just from the paperless routine I’ve followed in the last couple years.  I keep paper and digital copies of all of my important financial information and have a backup copy of documents stored digitally on a secure online database.

DIGITAL FINANCIAL BINDER OPTIONS

Since we are working with excel files, at the very least you will need somewhere to store these files.  And then at the other end, you may choose to store all of your files electronically.  Think about what will work for you and consider the following options:

  1. 100% PAPER SYSTEM-At this end of the extreme, keep everything in paper files, budgeting is done on paper, .  Don’t actually pick this option please.  Just throwing this out there as a (bad) option.  {ha}
  2. MOSTLY PAPER SYSTEM-Use spreadsheet files for financial planning, but keep all documents in paper form in physical binders.
  3. 50/50 SYSTEM-Have spreadsheets and many documents stored electronically, but keep some bills and statements in paper form only.
  4. MOSTLY DIGITAL SYTEM-Store most documents and spreadsheets in digital form, but still have some exclusively paper files.
  5. 100% PAPERLESS SYSTEM-Use a digital system to store entire financial plan and budget documents and files.  Enjoy a clutter-free life.

Most likely, you will fall somewhere in the middle ranges, unless you’re an old great-grandmother without a computer (although most probably do these days-shame on you!) or a super Type A personality that loves to scan and organize.  I personally keep most of my files and documents for my financial plan stored both electronically and in paper copy for quick reference.  Most of the documents in my “Annual Budgeting Binder” (monthly bills, statements, etc.) are kept in paper form, but my budgeting and expense tracking is all done electronically.  I create an annual budget at the beginning of the year in Excel and then track my monthly budget and actual expenses in YNAB.  I will talk more about this when we get to class PF104: Tracking Your Expenses and PF105: Budgets & Cash Flow Statements (see Class Overview Guide).

BENEFITS OF A DIGITAL SYSTEM

These are just a few reasons to set up your financial planning “binders” electronically:

  • All your files and documents will be very easy to find if they are well-named and you can use the “search” function to look for them.
  • If you are in need of sending a financial document to someone (for example, to apply for a mortgage loan), you have the files ready to send instead of having to scan them all in at that time.
  • It frees up physical space in your home (more room for craft supplies in my office!).
  • There’s no need to print and then re-print files again when things are updated-you know you always have the latest version.  But…It’s also a good idea to keep paper copies of previous versions of documents for the same reason-so that you know what the changes are from the prior edits.
  • Files and documents in electronic form can be stored on the cloud, making them accessible from wherever you are and backed up in case of disaster.

You are going to need somewhere to store the Excel/Google Doc files we’ll be using anyway, so even if you aren’t keen on the idea of primarily or solely using a paperless system to organize your financial documents, you will want an organized way to keep at least some files.

SETTING UP DIGITAL FILES FOR FINANCIAL INFORMATION

As the first step to setting up your digital files, I suggest the following file structures to match the physical financial binder structure, saved to wherever you feel is the most logical and secure place (internal hard drive, external hard drive, USB drive, etc.).  Using the same structure electronically as in your paper files will ensure that they will be easy to find and edit when you need them.

First for the personal financial plan binder, the structure is as follows:

Making Your Money Matter - Setting up and organizing your new personal financial plan binder. Tabs include financial goals, financial statements, insurance, taxes, savings & investments, retirement & estate planning and special situations.

Next, for the Annual Budgeting Binder, the structure is as follows:

Making Your Money Matter - Setting up your Annual Budgeting Binder with tabs for each month.

SET UP TEMPLATES

I’ve set up this structure for you if have a PC.  Just click the following zip file link, unzip it and save it to your computer or flash drive where you want to store your financial information and you’re ready to start adding your documents and files!

Personal Financial Plan Digital Binder File Set-Up

2016 Annual Budgeting Digital Binder File Set-Up

And because I really want to set you up for success and save you time, I’ve also set it up in Google Drive.  However, the process to be able to add it to Google Drive is a little bit more complicated and requires you to have the desktop app for Google Drive downloadable here.  After you have the desktop app (which is super useful anyway!), open the Google Drive folder on your computer, right-click, copy and paste each of the folders, which will make them so they are no longer shared folders (otherwise, it’s view only because only I have editing rights).  Hopefully that makes sense!  Then you can delete the shared folder versions and you’re ready to go!

Google Drive Personal Financial Plan Digital Binder Set-Up

Google Drive 2016 Annual Budgeting Digital Binder Set-Up 

Take the time to adjust the categories to match the accounts and situations that you have and you will be so grateful in the weeks to come!  Thanks for following along!

What system do you use to organize your financial information?

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2 Responses

  1. When setting up a digital filing system do you also scan and save all of the individual store receipts, like from shops, grocery stores, or any? Most of our purchases are via Debit Card.

    I don’t know what you call it or if there is a program out there, Neat maybe, but I was also wondering if you have thought about saving/logging grocery store items regularly purchased to try and have an idea where the most feasible store to purchase from would be for select items? You probably don’t worry about these things, but any way to save time/money is worth it to me. Any thoughts?

    Thank you,

    1. I don’t save my individual store receipts after about 3 months. I have a small box where I sort my receipts by month and every so often when it starts to get too full, I go through anything 3 months or older and throw them out.

      I started a spreadsheet to track individual grocery items at one point, but it just ended up taking too much time. I talked about it a little in this post:
      https://www.makingyourmoneymatter.com/lowered-grocery-bill-while-switching-to-organic/. She already has a good start comparing Aldi, Costco and others.

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