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How to Get Your Finances in Order & Stay Organized

Personal Finance
Young man researching furthering his personal finance education

Multiple bank accounts, credit cards, insurance policies, retirement plans, tax documents and receipts, loan paperwork and bills ... If you're like most people, you have a lot of financial "clutter" — and if that stresses you out, you might be wondering how to get your finances in order. These three steps can help you better your personal financial education in order to become more organized and savvy.

Step 1: Start With a Financial Audit

To get organized, you could start with a financial audit. In other words, take inventory of everything you have — good, bad and ugly. Make a list of the following:

  • All your bank accounts (that includes checking and savings)
  • Any money market or CD accounts
  • Any open credit cards (even if you don't use them right now)
  • Any loans or debts you may have, including your mortgage, auto loan and student loans
  • All your retirement plans, which might include 401(k)s, IRAs, Roth IRAs and others (list current plans and ones from previous employers)
  • Any investment accounts you have
  • Any insurance policies in your name

This list is by no means exhaustive; depending on your situation, you might also need to add things like college savings 529 plans, personal loans or other financial accounts and assets into the mix.

The goal is to list every single account, plan or policy you have. You want to know how much you own (your assets) and how much you owe (your debts or liabilities).

Step 2: Track Your Spending & Set a Budget

Once you know what you're working with, you can begin to optimize your finances. A good place to start is your cash flow. Your cash flow is the money entering and leaving your accounts each month. It's your income, expenses and what you allocate for savings or investments.

Organizing your cash flow helps you understand your finances because you can see exactly where your money comes from and, more importantly, where it goes each month. By tracking your spending, you can be fully aware of how much you're spending in different categories.

Simply being aware of your own cash flow can help improve your personal financial education. This knowledge is often enough motivation to change your habits if you're overspending or struggling to reduce your expenses.

If you don't realize you're spending $500 on restaurants each month, for example, you might wonder why you keep accumulating debt. If you actually know how much of your hard-earned money you're spending on restaurants, you might be driven to cut back so you can instead start paying off debt and possibly saving more.

Once you develop the habit of tracking your spending, the next step is to create a budget. That's the easy part; the hard part is actually sticking to it. But by using your budget as a guideline, you're more likely to spend reasonably. Hopefully you'll have more money left over at the end of every month to save or put toward other important financial to-dos such as debt repayment.

Step 3: Set Goals & Know What You Want

It can be hard to stay organized and manage your budget over the long term if you lack motivation — but setting specific goals can help keep you inspired.

Goals also give you a financial target, which is crucial. Organizing and budgeting help you see where you are today. Goals could help you plan for the future and achieve greater financial stability.

When considering what you'd like to achieve, you could follow the SMART goal-setting formula. SMART is an acronym that stands for specific, measurable, actionable, realistic and time-bound. These standards can help you set an effective financial goal that you're likely to reach.

If you're just starting to get your finances organized and on track, use these tips to help guide you. Knowing where you are today and where you want to be tomorrow is important to your future and your overall financial health.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.