Chapter 3. What should be my guide to clean financial clutter?

The most common tools that are used as guides to clean financial clutter are the budget and tax filing documents. It is advisable that you use both methods, which should simplify your life as you get ready to file your tax returns. 

 

How to

The budget as a tool - list all items on your budget as a checklist and keep records accordingly. Most budgets use categories of similar charges into one account. For example, all utility bills (gas, water, electric, internet, phone, cell phone, cable, garbage collection, water disposal, etc.) can be summed under Utilities. You can create your own checklist depending on your situation, but most consumers use between 10 -15 categories on their budgets. Some ideas are listed as follows:

 

 

Tax forms are another tool you can use as your guide to organizing your financial records and cleaning clutter. For example, if you file form 1040 and you itemize deductions, you need to keep each incurred expense in your files to make filing your tax return at the end of the year a simple and (maybe) enjoyable task. If your situation has remained constant, it is advisable to use a completed prior tax year as your guide. You can create a checklist and keep all items in one file. 

 

Practice

Now you know what to use as your guide for a checklist. Think of paying it forward and discuss your experience with a friend or a family member.

 

Congratulations! You can move on to Chapter 4. Which financial records should I review and how often?

To review the full module on Cleaning financial clutter, click here.