How to Create a Financial Binder

How to Create a Financial Binder

Written by Sam Getting Finances Done

It’s a common worry. Am I spending more than I should? When are my bills due? Have I paid them? Am I on track to reach my financial goals? Am I going to be able to get out (or stay out) of debt? Financial worries are not only one of the greatest causes of personal anxiety; they can also be one of the biggest strains on a relationship.

Many people don’t have their finances well organized and therefore aren’t able to tell where they stand. Disorganized finances can have severe consequences; In the short-term, you may end up paying hundreds of dollars in late fees and penalties. You may be digging yourself deeper into debt without even realizing it. In the long-term you won’t meet your high-level financial goals.

Couples often end up re-hashing the same financial issues over and over again because they don’t have a way of tracking the decisions and progress they’ve made as a result of their arguments…er discussions. If your finances are not organized how can you ever have any hope of getting them under control?

The good news is that by taking one simple step you can start down the road of financial security and begin to get your finances in order. You can get a good overall view of your financial picture and establish a base from which you can build your financial future. It all starts with creating your financial binder.

What Is A Financial Binder?

A financial binder is a place to keep all of your high-level financial information including important decisions and goals you’ve made. Instead of containing transaction-level, detailed information about your finances, it is a place for summary-level information about such things as bank accounts, bills, financial decisions, savings goals, taxes, and credit reports.

Your financial binder doesn’t necessarily have to be a binder. Any form of organizing papers into categories could technically work. However, there are certain advantages to using a binder.

Binders are easy to expand. You can always add more tabs or upgrade to a larger binder (up to 5 inches).

Binders are easy to customize. You will inevitably want to create categories and information unique to your situation.

A Binder keeps items in one place and prevents them from getting misplaced.

Binders are portable. My wife and I sometimes like to review our financial progress during quarterly getaways. Being able to take our binder and go makes it easy to conduct these remote reviews.

Paper Vs. Digital Systems

Many people ask why they shouldn’t keep their binder information in digital form. Although your binder is paper based, many of the contents may be created digitally. Simply take the last step of printing out the documents after you work on them and you’ll have a nice backup.

Whenever you print a document, be sure to record both the date printed and the digital location of the file for later reference. While digital files do have advantages I discourage the use of exclusively digital storage for the following reasons.


To continue reading, please go to the original article here:

http://www.gettingfinancesdone.com/blog/archives/2009/08/how-to-create-a-financial-binder/

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