I have been working with women and money for quite awhile, and, while it is my profession, it is also my passion. Numbers are my thing. Although there are a lot of people out there who can give all sorts of financial advice, my expertise is women and cash flow—the inflow and the outflow of money. It is my goal to help women understand money basics.
As a woman, I believe tending to the money part of our lives is an integral part of tending to our families. I have found most women put money management toward the bottom of their to-do list. They often feel overwhelmed by it. I hope to have a meaningful conversation over time with you about basic money management. In this article I am focusing on “Step One of a Five-Step Process in Personal Financial Management”.
Step One: Clear Out Your Inbox
“Clear out your inbox” is a term for cleaning up the business-type clutter around your house; examples include letters, bills, receipts, kids’ art projects, etc. Anything not dealt with contributes to anxiety. If enough of these build up, you will feel overwhelmed. In order to get on track and stay on track, you need to sort, to organize, and to prioritize your to-dos, including your financial to-dos on a regular basis.
The key idea: Organizing and clearing out items not needed from your physical space is critical to creating a financial plan. How? If you don’t have a space that is organized and cleared of unnecessary things, you probably don’t have all of the information necessary to create a successful financial plan.
The action plan: Buy an attractive file box, a basket, or “inbox” of your choice, a set of letter-size hanging files, and file folders. (Resource: Container Store, SeeJaneWork.com, Office Max, or a thrift store) Label each of the files: the first file “Action-Now”; the second file “Action-Future”; the third file “Bills to Pay”; and the fourth file “To File.” Throughout your week, put all incoming items you want to consider in the “Inbox” (for example, letters, bills, receipts, kids’ artwork, etc.).
At the end of your week, set aside one to two uninterrupted hours to go through the “Inbox.” My kids’ naptime has worked well for me. Put each of the items in the “Inbox” into one of the four files. Items in the “Action-Now” file could include items such as credit card bills that you want to call to reduce your interest rate, for example. “Action-Future” file should include items that do not need to be addressed this week and may include renewal of a life insurance policy that doesn’t come due for a couple months. “Bills to Pay” file should include bills that need to be paid this week. “To File” items may include receipts of paid bills, copies of insurance policies just received, etc. At a later date, I will discuss a full filing system to support every area of your financial and personal life.
Wrap up: Tending to our financial well-being is as important as taking the time to tend to our physical well-being. Spend some time this week taking care of your financial well-being by organizing items into your new, labeled files and clearing out unnecessary items from your physical space. Let me know your results. How does it feel?
