Wednesday, November 17, 2010

Budget and Get Financially Organized

A benefit of budgeting is that it helps to get you financially organized. Often when we are in debt a side effect is that we are disorganized with all of the paperwork, bills, and information. Getting on a budget changes that. Here are 3 ways that budgeting gets you financially organized.

1. Wasn't There a Bill for That?

We have all been there, searching for a bill that you have misplaced in the large pile of bills on your desk. Or shoved it into a kitchen drawer only to find it months later. Most people in debt have misplaced their bills or monthly statements on many occasions. Or if they do know where they are those bills have not been opened and still sit in their original envelopes in a big pile of other bills.

But creating a budget will force you to go through those monthly bills and to start organizing them by filing them in folders and placing them as line items on your budget worksheet.

Start by going through your avalanche of bills. Open the envelopes. Pull the bill out and organize them in piles. Group credit cards together in one pile. Utility bills in another. Auto and school loans in a third pile. And so on. Next place those piles into individual folders and stick them in a filing cabinet or hanging folder box.

Finally get those bill amounts and what you owe onto your budget sheet. Then file the bills in your filing system. You will now know where every bill and statement is and it will force you to get organized.

2. Eliminate Paper Waste

Part of getting organized is knowing what to keep - the actual bill statement - but also knowing what to throw out. You do not need the envelope the bill came in. You do not need the return envelope if you pay your bills online. And you do not need all of the ad inserts they stick inside every envelope with the bill statement. Make it a point that when the bill comes in the mail that you open it right away, remove the statement and file it as described in step 1 above, and then throw out all of the remaining paper in hand. Organizing by eliminating the waste will make the whole bill payment process seem easier. And you won't be distracted by all of the extraneous paperwork.

3. Use Bill Pay

Most banks offer a bill pay service. Where you can pay your bills online from your bank's website. Take the bills you have gathered from Steps 1 and 2 and start entering them into your Bill Pay service. Then once or twice a month when you have to pay the bills, pay them all at the same time from that one location. This will save you time. And it will save you the cost of a stamp. Most bill pay sites just require the company name and the account number to set up the service. Some can even be set up to do automatic bill pay.

Also, if your bank does not include the credit card or company you owe money to, then go to that companies own website and take advantage of say a credit card's own online bill pay service. Most credit card companies are capable of taking payment online and will even send you an email confirmation of the transaction.

By taking these steps - gathering up all your bills, eliminating the unnecessary paper waste, filing the statements, filling the amounts in on your budget, and taking advantage of a bill pay service - you will finally get financially organized and will easily be able to erase debt.

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