A Place for Everything

My Dad has the most beautifully organized garage of anyone I have ever known (but, no this is not a picture of my Dad’s garage). It has always been tidy, my entire life, but honestly I had never really thought much about it until the other day. A good friend and I had had a play date with our kiddos at my parent’s house. As we were walking through the garage on our way out, she stopped and looked around and said, “This is beautiful!” I honestly didn’t know what she was talking about, but she said it again, “Your Dad’s garage is beautiful!” As I looked around, I really saw his garage through the eyes of an adult for the first time. Every hammer has a place to hang. Every tool is hung neatly from a peg board, much like this picture. He has glass jars full of neatly organized nails and screws of all sizes. Everything in his garage has it’s place, and it really is beautiful.

The fun thing about his garage is that in doing a project at my Dad’s house, you always know that he has the equipment to do it and exactly where to find it. As a child who loved to do projects, I used to constantly “borrow” hammers, scissors, tape, or whatever from my Dad and never returned it. As a parent of three small children who also never put anything back, I have so much empathy for my Dad in his struggle to keep his well stocked, well organized garage safe from being pillaged and the bounty disappearing into the abyss of my room. I laugh now, because I am sure I have well earned all the missing jewelry, chap stick, shoes, keys, and tape that seems to disappear in the hands of my own children. But the bottom line is, having a place for everything truly does make projects so much easier and even more fun, and not having tape when you are in the middle of wrapping a present and the tape has disappeared is no fun at all.

In putting together this notebook (or filing cabinet/bin) I truly believe that your finances can begin to feel like my Dad’s garage. Not everyone will be able to recognize it, but your finances will be a thing of beauty. Your taxes will be easy. Your bills will be easy to find, track, and to manage. This step is so crucial because it will be very difficult for you to budget, if you don’t know what you are currently spending each month. In getting your bills and statements in order, you are setting yourself up for success in everything that we are going to be dealing with in the coming months. You are setting yourself up for success for the rest of your life.

So the next step is to take the first group of bills from the top of your stack. There are going to be two types of bills: a bill that fluctuates (like your water bill) and a bill that is fixed (like your mortgage). Let’s take your water bill as an instance of a fluctuating bill. If a bill fluctuates, you are going to need the last year’s worth of statements in order to get an accurate average for your budget. If you don’t have the statements because you have thrown them away, or because you get email statements instead or for whatever reason, don’t worry about it. We will be dealing with those contingencies later as we get into the detail of setting up your budget. Right now we are putting a plan in place for the paperwork that you do have, and hopefully most of the information will be easy to find when it is time to budget. So look at the dates on your statements and keep the last twelve months of statements and then archive (file in a box with cheap manila folders) the rest.

Even if you are using a filing system instead of the binder, you will only want to keep the last years worth of statements in the cabinet, because otherwise your filing cabinet/tub will become too cluttered and unmaneagable. Take this opportunity to de-clutter your filing cabinet and archive all of the rest because in doing so you are really de-cluttering your financial life. Also, it is miserable to try to stuff a file into a too full filing cabinet. So now back to the binder. Take the twelve most current statements, hole punch them, and put them behind the appropriate tab in your notebook.

If the bill is fixed (like your mortgage), you are only going to keep the statements from this year (2008) in your folder, so you will only need the statements dated from the beginning of the year. Take a manila folder and archive the rest of the statements. You will want to keep these archived statements until their tax liability has expired (which I think is either 3 or 7 years – I will check on this somewhere in the next 3 years and write a blog on it to let you know 🙂 ). And that is the plan for today… lots of hole punching, but with a three-ring hole punch it will go very quickly.

Not every part of the journey to budgeting is fun, and you may not love this step, but I guarantee that you will love looking at that notebook once it is finished as compared to a frightful mound of disorganized bills, and you will love the freedom that is going to come into your financial life. So hang in there and see this step through. This is the end of the monster in the closet and is helping to guarantee that there will never be another monster in the closet. There will be a place for everything, you will be out from the cloud of fear and dread, and managing your finances is going to be so much easier and consequently a lot more fun… and that is a beautiful thing.