Sprucing Up Your Financial Life.
I am not an innately organized person. This may seem strange given my chosen profession, but most of my systems and organization has been learned over time and is strongly tied to necessity rather than preference. One of the ways that I stay on top of things is to schedule time for organization. It ain’t gonna happen if I don’t. The new year always seems like the perfect time to do some of that work. As you hunker down in the cold and gray and prep for taxes, here are a few steps you can take to get your finances in order and clean out the crap that has piled up over the year(s).
Organize files from the previous year. This can include all or some of the following:
Getting receipts organized in your system of choice (files, envelopes, or scanned to an app or cloud folder)
Download and save all bank statements for the year (physically or digitally)
Download and save all payroll tax documents (physically or digitally)
Run and save a final Profit & Loss and Balance Statement for the year. (physically or digitally)
Shred old files. If you’re like me, you may hold onto things way longer than needed because it's just sitting in a file cabinet. (hello, my taxes from 2007…) Here are some guidelines for how long you need to keep things.
Receipts, statements, invoices and supporting documents - 3 years
Employment tax records and payroll - 4 years
Income records - 6 years
Documentation for bad debt deduction - 7 years
Old tax filings and documentation - 7 years
If they have reached their deadline, let’s shred everything to protect yourself from identity theft and clear out space both mentally and physically.
Stop unnecessary mail.
Most of us have online banking access that provides us with bank statements going back a year. And if you don’t, your bank will email you a PDF of statements going back up to 7 years at least. Unless you regularly reference your statement or you are closing out the account, there isn’t a reason to get that statement in the mail each month. Some banks even charge for the service, so why not save that $5 and declutter at the same time?
Get less junk mail. There are two ways to slow the onslaught of junk mail. First go to DMAchoice.org and opt out of marketing mail. This costs $2 and is valid for 10 years. Next go to https://www.optoutprescreen.com/ and opt out of pre-approved credit card offers. This is a free service of the credit bureaus.
Check in on your financial big picture.
Pulling your credit report each year is something you have access to for free and you should be taking advantage of that. During COVID, they continue to offer free weekly credit check-ins as well. Visit https://www.annualcreditreport.com/index.action to download your free reports from all 3 major credit reporting entities.
Sign up for ongoing credit monitoring services. There are free and paid services online. Your credit cards may offer this service as well. This is a great way to stay on top of your credit.
Ditch your password notebook (or your faulty memory) and add an extra layer of security to your financial life. Password managers provide encrypted vaults to store passwords and other sensitive documents and info. Here at Missoula Bookkeeper, we use LastPass but there are several other good options. Our plan allows us to store credit card info, passwords, and document images, like passports.
Hopefully taking these steps will get your year started on the right foot and keep some of the chaos at bay.
Another tool we love to use is accountability. In that vein, Missoula Bookkeeper will be posting monthly goals that you can choose to complete with the camaraderie of other small business owners like yourself. We will also be offering a few select spots each quarter for in depth financial analysis and planning. These sessions will help you understand your historic financial data and make big plans for the future.
Let’s move into this new year with a little less clutter (both mental and physical) and a lot more tools to help us succeed as small business owners!
Client Profile: The General Public
We love our clients, and we especially love great style. Let us introduce you to The General Public! Located in the historic Florence building, The General Public is an amazing shop that focuses on curating unique goods from thoughtful and ethical designers. The next time you are downtown, stop by and visit Allison and the gang and check out all they have to offer!
“A good system shortens the road to the goal.”
