One of the biggest
pitfalls in personal finances is being disorganised. Have you ever
thought of organising your finances electronically?
If you are
comfortable with technology, and are fortunate enough to have access to
it, one of the easiest ways to maintain your records, is to use
technology and personal finance software.
Advances in
personal finance software have made it possible for anyone with a
computer and regular internet access to create budgets, pay routine
bills, manage bank accounts, track every day finances, and monitor
their investments. Assuming you have already registered with your
bank’s electronic banking facility and most of your regular
transactions are handled electronically, you can take things even
further. Microsoft’s Money and Quicken are just two of the more popular
solutions.
Getting started
Perhaps, the
hardest part of organising anything, including your finances, is
getting started. Take the trouble to learn the basics of your software
by completing any online tutorials. If you do not make an effort at the
onset, the experience will be tedious, and this might defeat the whole
purpose of the exercise.
It can be a
daunting task to set up all the relevant accounts, extract information,
and then input it on your personal finance software. We often have far
too many accounts that we don’t need so this might be a good time to
streamline your accounts. Start with your current account, and then set
up accounts for your loans and investment accounts.
Most personal
finance programs can be downloaded from the company’s website and are
relatively easy to use, even for those who are not technology savvy. As
the leading software is usually compatible with the more common banking
platforms, with the click of a mouse, you should be able to download
your bank account and investment information directly, which makes it
much easier for you to reconcile your accounts. No matter how companies
try to simplify the process, however, you cannot avoid having to input
some account information manually.
Personal finance
software can be a great tool for financial planning. You can print out
reports that will help you analyse your income and expenses, and
spending categories are often in place so that you can at a glance
determine where your money is going. Most programs include a budgeting
tool, which even helps you track how well you are sticking to your
budget.
Scan your documents
Are you swamped by
paper? Paperwork consumes our offices and homes and our lives. All
those paper bills and statements tend to pile up, and they need to be
stored somewhere. One of the best ways to store and backup your data is
to scan your critical personal and financial documents. Invest in a
document scanner. By scanning many of your sensitive documents and
storing them online or at least on a hard drive you can reclaim some of
your space.
Many smart phones
have applications that you can use to “scan” documents using the
integrated camera; some of these produce very good digital mages. An
electronic version well protected from fire, theft or other loss, is
easily accessible and will also be legible long after ink has faded. It
doesn’t take up any space, except on your computer hard drive or your
flash drive.
Once you have made
an electronic copy of the documents you wish to store, you will be more
confident shredding the documents that you don’t need to keep to reduce
the clutter. There are always critical financial documents that must be
retained all your life in their original form for verification
purposes; these include birth certificates, passports, insurance
policies, title documents. These should be kept securely in a secure
fire proof cabinet or safe, but it is useful to retain scanned copies
of these documents as well.
Don’t forget to back up regularly
It is not advisable
to maintain your most sensitive financial documents on your personal
computer or laptop, as saving all your data locally leaves you
vulnerable to corrupt files and data loss, which can be very difficult
or often impossible to retrieve. Even worse, as if you lose the device
or it is stolen, hackers may gain access to your sensitive information
and use it fraudulently.
Store your
documents on a removable USB storage device or on a CD as additional
back up. It is a good idea to back up your hard drive and keep a copy
of your data off site in a different location from your computer as an
additional precaution.
Avoid a backlog
Once you are
organised, try to take some time, if possible, weekly, or at least
monthly or at least quarterly in order to scan, file and shred
documents. If you allow the documents to accumulate beyond this, it can
become overwhelming. When you manage the process in smaller chunks you
are less likely to become discouraged and leave things to pile up.
Most people have challenges making the transition from paper to
technology. Over time, paper accumulates and becomes a major
organisational problem. By migrating from paper to electronic document
storage you can save both time and space. Once you start organising
your finances electronically, you will wonder how you ever coped
without technology, and an added bonus is that it is good for the
environment.
