1. Action, girls, Action! Create an action folder in a bright color (we like neon!) for expenses that demand your attention right away. This includes rent payments, utility bills, health insurance premiums, etc — anything that has a solid deadline. You should pay these items as soon as they arrive in the mail, but hey, we get that that isn’t always possible. Stick them in this bright folder and keep them out on top of your inbox or filing cabinet to be paid within 3-5 days.
2. K-I-S-S. “Keep it simple, stupid.” Yes, we know, it’s easy to get carried away with the ol’ label-maker, but you don’t want so many expense categories that it takes longer to find the right folder than to file it. Divide expenses into “home,” “utilities,” “food,” “health,” entertainment,” etc. (aim for no more than 7 categories). This will make filing easier to manage and give you a better idea of what you’re spending in each bucket.
3. Keep it handy. Regardless of your method of organization, be sure to keep your files in a place where they are easily accessible…maybe even downright noticeable. We’re not saying you should make a wall collage of receipts (although maybe that would look kinda cool?) just keep them in a place where you can file and go with little hassle — like near your front door, or by your closet, anywhere that you’re likely to be emptying your pockets or purse. Hint: use a dishrack for a fun and inexpensive way to hold your folders.
4. Cut the clutter. You’ll find it’s much easier to stay on top of expenses if there is less volume to deal with. Invest in a basic shredder (Amazon features a few models for $30) and purge your filing cabinet of the following:
- Monthly bank statements
- Credit card offers
- Documents that are seven years old or more
- Receipts not related to business and/or tax returns
- Utility bills not related to business and/or tax returns
Watch your paperwork pile shrink in half, and it will be much easier to tackle what’s left.
5. Go digital. Pop quiz: what’s the best way to avoid losing receipts? Answer: don’t have them in the first place! Keep track of expenses digitally with an app on your smartphone (we like lemon.com or expensify.com). You can scan e-receipts using your phone’s camera, or email receipts from online purchases directly to your account. You can also tag each expense by category and easily pull it back up later, plus these apps will give you a summary of how much you’re spending within each category. So long, pencil and calculator!