Spring Cleaning: Organize Your Finances!

A few thoughts on how to approach your financial spring cleaning.

You can tell that spring is just around the corner when the snow is melting, it's raining more, and people stop wearing heavy winter coats. Spring is a great time full of new life and exciting possibilities. It also means spring cleaning.

I'm sure most of you aren't fans of cleaning, especially intense spring cleaning, but it can be a great thing. Cleaning out your residence, vehicle, or work space gives you a better idea of what you have. You can then decide what you need and what you don't need. I find cleaning out a room very satisfying because when I'm done I feel so clear-headed. I know that it's organized and I don't have to think about it, so I can focus on other things. I also find purging my belongings a cathartic experience and one that teaches me I often buy too much. But once it's all clean I can breathe much easier and I feel like I've lost a mental weight just from getting rid of all those unnecessary items. 

And I also guarantee you that getting your finances in order will be just as rewarding a feeling as cleaning out your garage.

Organizing Your Computer

So first there is the obvious spring cleaning: that huge mess of boxes and junk in your garage; the piles and piles of clothing in your closet; the overflowing kitchen cupboards. But what about your finances? A lot of people, like myself, do most of their financial management online. This means that it's out of sight and it's harder to see what a mess they can be in. 

Maybe you have a lot of e-mails in your inbox regarding financial statements. Do you still need them sitting there? Or would it better to file them in their own folder or just delete them? Do you have e-receipts for purchases made online? Put them in a receipts folder. Have people e-mailed you charity receipts and T4's? Do you have them in a special folder marked taxes? No? Take 2 minutes, do it, and you'll be better off.

I would recommend taking a look at your e-mail and organizing everything into specific folders. If you get into the habit of sending them to the appropriate folder as soon as they arrive you won't need to do a big clean-up. It's also a good idea to look at any other financial documents sitting around on your computer? Anything in excel? Organize these documents with names clearly stating what they are and put them in the appropriate folder. 

Receipts

I like to keep my receipts super organized because it makes it a lot easier when I have to make a return. I used to just throw them out or toss them in my purse and curse when I really needed a receipt and couldn't find it. How many of you have lost out on money because you couldn't return something without a receipt? Think of organizing your receipts as an opportunity to save time and money in the long run. 

I keep my receipts in a small file folder I bought at Wal Mart for about $4.00. It has 13 spaces, so I use 12 of them for the months of the year and then the other one for various things, like receipts I need to be paid back for, business, etc... I try to put my receipts in the file folder as soon as I get them so that it doesn't become overwhelming. Filling 3 receipts is a lot quicker and less painful than filling 300 at one time. 

My receipts file folder

While doing my own spring cleaning I am going to find the oldest receipts and figure out whether to keep them or not. For tax reasons you should keep important documents/ receipts for six years. However, if you aren't claiming any of the receipts on your tax return, you often don't need to keep them that long. However, there are other reasons for keeping receipts longer, like for major purchases with a warranty. In order to claim most warranties you'll need to show proof of purchase. 

So even if you have your receipts super organized like me, there are still further opportunities to clean them up right now.

The Home Office

Most people have a space they do work from at home, be it an office, a desk, or even the kitchen table. Whatever the case, take the time to gather up all the loose papers there and file them away appropriately. 

I recently read a great book recommended to me by my husband called Getting Things Done by David Allen. David Allen is a professional management consultant and expert on improving productivity. His book is a great motivator for anyone looking to organize their work spaces and improve their productivity. He gives great practical tips including the "do-it, delegate-it, defer-it, or drop-it" rule to get your inbox empty. If you loved the book and are looking for more of David Allen's help, he has a great website that lists his services and upcoming seminars. He also has a blog where he posts articles regularly. A lot of the stuff on his blog and website relate to the business world and how to act in it, but he does have a lot on organizing as well, you'll just have to look for it. For best results, I recommend starting with the book. I read it, loved it, and am now implementing a lot of his suggestions.

Organizing your home office can also include updating the look of it. Do you have pictures of your kids hanging up? Are your kids now in their 20's, married, maybe even with their own kids? It could be time to update the pictures and the decor. 

Keeping your work space organized will hopefully help you streamline your work flow and improve your productivity. By keeping things in good working order you'll also ensure that things don't slip through the cracks. If you don't have a work space at home where you can work on your finances, you need to get one. Seriously, it is very important. 

If you're tight on space I would recommend getting an office in a box. If you watch 'Til Debt Do Us Part with Gail Vaz-Oxlade, you'll remember seeing her give them to show participants without an office. The office in a box is basically just a file folder where you can store all of your financial records. All the tools you'll need to work on them should also be in the box including some office supplies. It shouldn't be more than $20.00 and is definitely worth the money. Having one will mean that next time you need to pay a bill or check on your finances you'll know exactly where everything is. No more scrambling around!

Tax Season

Tax season is also just around the corner (more on this later), so this is a great opportunity to find all those documents and receipts you'll need for filing your taxes. Getting them all together beforehand will definitely save you a lot of aggravation and will make filling your taxes a quicker process.

And if deductions motivate you (like they do me), then just think of all those things you can claim once you have the receipts and papers in order. If you don't remember what you've spent money on, you'll likely forget to claim it. So get your stuff together and claim as much as you reasonably can. You'll also be all prepared in case the government decides to audit you.

It Can Be Fun-ish!

I know cleaning isn't everyone's favourite thing to do, but it's necessary. So take the time to do it right. There are ways to make it easier, like doing a little bit at a time. You could pick one room to start on and give yourself lots of time to get it done. That way it doesn't feel so daunting. I find cleaning doesn't require much mental power so I like to watch t.v. or listen to music while I'm doing it. It can be a great chance to do something you have to, while catching up on that show you just haven't had time for lately. Why not get the whole family involved? As the saying goes, "many hand make light work". So get everyone in your household involved in the process and it'll get done so much faster. Even children can organize and clean their rooms while you tackle the bigger projects. 

I hope this post has motivated you all to take a look at your finances and get them tidied up. Remember to keep yourself motivated by thinking of all the time and money you're saving yourself down the road.