As 2019 winds down, it’s time to file paperwork and get ready for the new year.
I am not, by nature, an organized person, and so it is essential that I have systems in place if I hope to stay on top of things. Family finances are one of those areas where you can’t fall behind or forget things, so managing incoming bills and financial accounts is one area where I have established a system that keeps our household finances running smoothly.
When determining what my Family Finances system required, I considered several areas – incoming bills, account balances, due dates, and tracking bills payed. I also needed a plan for tax season prep, which I will cover separately.
My Family Finances system is simple and low-tech. I’m a pen and paper kind of gal, and I know what I will and won’t use with any regularity, which is why online or software-based systems tend not to work for me. Note that I am speaking specifically of my organization plan, and not online banking and bill pay.
The system I use has three components – the hanging file folder box, the monthly folders and the Record sheets. In addition, I have a “routine” for handling receipts, end-of-year organizing, and preparing for tax season.
File Folder Box
Like most people, I do have a file drawer or file cabinet for all the documents that collect over the years. But I know that if I want to stay on top of our finances, I need to have my current financial documents separate and on hand. So I have a smaller hanging file folder box that I keep near my work area and computer. I want this box to stay neat and not get overwhelmed with STUFF so I only keep current financial document folders (monthly folders mentioned below), a tax folder, and the rare folder for an ongoing issue, such as property taxes or home warranty. I also keep a folder for receipts for the year.
I start my year with twelve folders, labelled with the twelve months. While I’ve used regular manilla folders for years and they certainly do the job, this past year I discovered file folders with a clear plastic cover, which I love and recommend. I use hanging folders in a file folder box to organize for the year.
In the front of the folder, in the clear cover, I keep my Record sheet, where I track financial info and due bills throughout the month. More on the Record sheet below.
As statements come in the mail, I put directly into the current month. For some items that aren’t monthly, I put them into the month that they are due.
All bill statements stay in their monthly folder throughout the year. On occasion, when I’ve had to look for a particular statement, I know I can go back to the month in question and retrieve it. In my file folder box, once a month ends, I move that folder to the back of the box so that the current month is in the front.
Each month has a Record sheet where I track account balances, and all due bill information. *Check out the Downloads page for Due Bills template!
At the top of the page,, I track my account balances – checking, savings, HSA account, as well as credit card accounts. I check my balances weekly, so I have four columns for updating my Record sheet throughout the month.
The remainder of the Record sheet is for Due Bills. For recurring accounts, such as mortgage and utilities, I have the names prefilled on my printed forms, and I fill in due dates at the beginning of the month, since the due dates typically are the same each month. For other bills, I list the account, and due date as they come in the mail.
Each week I check my balances and update the Account Balances at the top of the Record sheet. I then pay any upcoming bills using either Bill Pay through my online banking website or on the individual account website. It is rare for me to write paper checks, but for some things, like magazine subscriptions, I still use them.
When I pay a bill, I record the Date Payed, Amount Payed, and the Confirmation number after the payment is processed. If I am sending a paper check, I record the check number. And while most bills are payed from my checking account, there are some items that are payed with other accounts, such as medical bills payed from the HSA account. For these cases, I make a note in the confirmation column which account it was payed from.
Some accounts I have set up to do Auto Pay. I still track these payments on my sheet. I list the account and due date, include an (A) next to their name. When I check my accounts each week, I take note of any auto payments that have cleared and record the date it cleared and any confirmation number listed.
Rolling Over Payments
Not all payments have a firm due date – subscription renewals and property taxes are good examples. I will put bills into the current month, but if I don’t pay something by the end of the month, I move to the next month and record the bill on my new Record sheet.
I have a bad habit of collecting receipts until they overwhelm me. But I’m working on the problem!
I keep all of our receipts in the short-term, and check them for items that might need to be returned in the future or have some warranty value. Receipts for groceries and things I am sure won’t need returning get shredded and tossed. Receipts I want to hang on to go into a small folder in my file box for general receipts. I also have a small folder for all medical receipts – this includes pharmacy and payments for services where receipts were obtained, like dentist or optometrist.
At the end of each December, after the final bills have been payed, it’s time to reset my folders for the new year. I take my folders and separate the statements by account – all mortgage statements, credit card statements, etc are collated and clipped together. The Record sheets are compiled and clipped together as well. Finally, all of the statements and Record sheets for the year are put into a single folder labeled for the year and moved to my main file drawer. Now if I need to find a particular statement, I can first search by year and then by account.
I also go through any receipts I’ve kept – major purchases like electronics or appliances go into an envelope and then into the Year folder. Medical receipts for the year are put into a separate envelope and into the folder.
New Record sheets are printed and the monthly folders are reset for the new year!
I know that tax documents start rolling in at the beginning of January, so I prepare a Tax folder and keep handy at the front of the file folder box. I make a checklist on a post it note of what documents I am expecting – any W2s, 1099s, things I know come every year. I check off items as they arrive and when I am sure I’ve gotten everything, usually by end of February, I sit down to do our taxes.
After our taxes are calculated and filed (I always e-file) I print our final tax forms and into the Tax folder they go. I keep all the documents, as well as the printed tax forms that were filed together, and the folder gets filed away.
And even though I am low-tech, I do use my computer! I keep a tax folder for each year on my computer. For those tax forms I receive as emails, I copy to the Tax folder, and then print a hard copy for my file folder. After I e-file, I save the pdf of my tax forms in that year’s file, and put a hard copy in the file folder.
Since realizing that low-tech and pen-and-paper is what works best for me, I’ve been able to fine tune my current system so that I don’t miss payments and have all of our financial information organized and available when needed.
I’ve tried several ways to stay on top of finances through the years, and what I have discovered is this – the system that works best is the system that works for you.
[…] I shared a photo yesterday on IG of my usual end-of-year task. I always end the year with clearing out my monthly due bills folder, prepping my monthly overview pages and organizing and filing the year’s documents. Twelve folders, actually thirteen including my 2020 Taxes folder, are prepped and ready to go. No monthly scramble to get organized, no misplaced paperwork. You can read a more detailed description of my Due Bills system here. […]