Organization is the key!

Now that you understand "what budgeting is", "how to Track your expenses" and "what your typical spending day looks like" it is time to look at:

The most important part of budgeting which is to be organized.

You need to have a place where you keep everything that needs to be paid.

You should have a system that works for you:

• some experts: advise using an envelope system
• others advise: using a shoe box, file folders or a drawer 
• there are computerized systems such as: Quick Books, Quicken and others
• use whatever works for you

What you need to be able to do is:

• put your hands on your bills at regular intervals so that you can pay them in a regular fashion.

There is a real education and experience to be gained when learning about  paying your bills:

• all bills have due dates
• some bills have surcharges if you don't pay by a certain date
• many credit cards charge interest that continues to accrue until the debt is paid in full
• some credit cards charge over the limit charges and penalties for late payment
• some credit cards charge for insurance and other incidentals
• learn what the interest rates are that are being charged by your creditors, you may want to negotiate or ask for a lower rate

You need to know all of this information so that you can plan the best way to pay your bills and meet your ongoing expenses.

Some of the systems that can be used can assist with organizing where to store your bills, other systems help you organize the actual payment of your bills.

The following methods will help your organize where to store your bills:

• using envelopes, file folders, a drawer, wicker basket, shoe box, etc. 
• putting them on the table, counter or desk
• accordion files can be used with numbers 1 to 31 for the days of the month, or with alphabet letters from A to Z

These methods will only work if you actually put your bills in one of these places on a regular basis.

Where Do you store your bills?

Once you have determined where you will store your bills so that you can put your hands on them on a regular basis to pay them; there are systems available to help you organize how to pay your bills on time.

You can organize the storing of your bills:

• by their due date (which is the system I like)
• or by creditor name
• or keep them in a pile, or several piles
• organize your bills by your pay dates weekly, bi-weekly or monthly,
• organize bills according to the time of the month such as the first, middle or end of the month, etc.
• these systems can be manual or computerized depending on what you like and what your skill level is

I use a manual system for:

• storing my bills in an accordion file numbered 1 - 31 (bills due on the first of the month go in number 1 and so on... )
• recording bill payments and their due dates (I like to break my month up into thirds, from the first to the tenth, the eleventh to the twentieth, the twenty first to the thirty first)

I use a medium spiral notebook  to record weekly which bills are due from the first to the tenth, the eleventh to the twentieth and from the twenty first to thirty first of the month. This system works very well for me as it allows me to see a few days, or weeks ahead of time what is coming up and what will be due to be paid.

I use a computerized system for paying bills through computer banking. For several years I used telephone banking because I was afraid to use computer banking because of security issues. Once I started using computer banking I never returned to telephone banking and I wished I would have started computer banking earlier.

What's your system for storing, recording and paying bills?

Pay bills:

• by writing cheques,
• purchasing: money orders or certified cheques
• or by telephone
• or Internet banking

 Keep Records:

• manually by writing payments down in your cheque register, or your notebook
• computerized if that is the system you are using
• print out statements from your computer banking
• keep track of the date you paid the item, the amount you paid and the payment method (cash, cheque, money order, computer or telephone banking)
• keep track of the account numbers for the debts you have paid
• keep receipts for proof of purchase and payments of debt
• keep all creditor statements for at least two years, then destroy by shredding

Keeping records is very important. If you ever have to verify that you have paid something, or if a discrepancy occurs a few months later, you may not be able to remember all of the important details when you are trying to verify with a creditor, that you actually paid the debt.

Once you have mastered organizing your debts you are ready for the next stage of Budgeting.