Discover the art of financial tidying up

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Discover the art of financial tidying up


Hit by the spring-cleaning bug? Well, how about adding your finances to the "needs to be tidied" pile?

With the advent of apps, online banking and paperless statements, our financial lives are both easier and more complicated than ever. Even figuring out whether we're on the right track or need to rethink our current strategies requires organizing a lot of information.

We spoke to professional organizer Julie Morgenstern for her tips on spring cleaning your finances and balancing paper and digital records.

Choose your medium.

The choice between managing your finances on either paper or digital devices doesn't have to be absolute -- you can opt for a mix. But it's important to know which sets you up for maximum success.

If paper helps you absorb the content, embrace that decision rather than trying to force yourself into a different organizational system, she says. "Visual, tactile learners and thinkers might want to get their hands on something very quickly; they may want to spread things out on a table in front of them."

Meanwhile, if zipping between various accounts and spreadsheets helps you engage with your financial information more efficiently, then you should go digital whenever possible.

Calm the clutter.

Even if you prefer managing finances on the computer, you probably have a stack of papers somewhere. Morgenstern recommends writing down your "treasure criteria," or the guidelines to determine what merits keeping.

Ask yourself questions like: "What would hurt me if I lost it?" Then separate your papers into subgroups, tackle one at a time and decide what to throw out. Morgenstern recommends four main categories:

Bank, brokerage and credit card statements

"Banks have made it easier than ever to manage information online, so unless you really need hard copies, you can save yourself time and storage space by keeping those statements online," Morgenstern says.

If you can't quite let go of your paper habit, you can always keep hard copies up until December, she says, at which point you get an end-of-year summary and can shred all your monthly statements.

Tax records

Whether or not you file your tax returns electronically, there's often backup documentation on paper. This could include receipts for tax-deductible expenses, records for your mileage, charitable receipts and more.

In the past, experts recommended saving tax documentation for seven years, Morgenstern says, but the new standard is about three years. That said, the length you maintain your documents is contingent on your personal financial history.

"Check with your own accountant," she says, "because if you had some transaction five years ago that has implications for you in a year, you should keep those records."

Insurance and property records

It's probably fine to keep health insurance explanations of benefits online, Morgenstern says, since you should be able to find them again through your insurer's website. But for certain documents, you may want to scan and create a digital file, and then store paper copies -- ideally in a fireproof safe.

These key documents may include:

  • Mortgage papers
  • Original policies (including health insurance)
  • Proof of coverage (health insurance and car insurance)
  • Leases
  • Titles
  • Property records
  • Other contracts

Receipts and warranties

Receipts for day-to-day spending can help you manage your budget, but you don't need to hold onto them forever.

One tactic is to put the majority of your spending on one credit card and look at the aggregated picture on your monthly statements. However, if you struggle with impulse buying or have trouble sticking to a budget, this might not be the best strategy for you -- research has shown that people tend to spend more freely when they pay with credit cards than when they use cash -- otherwise, this can be one of the most seamless ways to track your expenditures.

Receipts that merit saving over the long term include those from major purchases such as appliances, artwork, furniture, home repairs and jewelry.

Tackle your 'someday' to-dos.

There are plenty of money-related tasks that'd be great to do, but never seem quite important enough to make it to the top of the list. Like checking your credit score and credit report. Or digging through your credit card's benefits to make sure you're maximizing all the perks at your disposal.

Spring cleaning is a great excuse to finally make these things happen. Whip out your calendar and plan specific times and dates when you'll actually achieve your to-dos.

Aim for only one project per day or week so you don't burn yourself out. If you do this for a few Sundays in a row, it's possible that before you know it, your to-do list will only read: Get out and enjoy that beautiful spring day.

After that, try choosing a regular date to check on your finances. This could be as simple as 15 minutes during your lunch break every Friday.

"I've found that the people who do a good job managing their finances invest time either daily or weekly so they can stay on top of things," Morgenstern says.

Tools for organizing

Some people thrive on simplicity: Give them a basic manila folder and a drawer, and they're all set. Others, however, could use a little help. Here are some of our favorite tools to get our financial life in order:

Google Calendar: Schedule your regular money check-in now. To make sure you never forget, try adding the Google Calendar plug-in for Chrome and syncing your Google Calendar with your phone. If you're a Mac lover, use iCalendar to do the same thing.

Automatic bill pay: Set up all your bill payments from one central place -- like your checking account -- so you never forget a bill, and so you can easily see at a glance how much is scheduled to be deducted from your account.

This may be more convenient than setting up automatic payments through all your different vendors, like utility companies, because it centralizes all your pending payments. Most banks let you do this easily online.

Evernote or Shoeboxed: Receipts and other paper documents getting you down? Shoeboxed and Evernote's Scannable tool are both easier than using a traditional scanner, as you can simply snap photos of your docs with your phone. Both services can automatically extract information from business cards and add it to your phone's contacts, too. Scannable is free, but Shoeboxed charges a monthly fee.

To-do apps: If writing down your to-dos on a slip of paper isn't cutting it anymore, consider downloading an app that can help you keep track of your tasks when you're on the go. We've heard good things about Wunderlist, Remember the Milk, Teux Deux, Todoist and

Budget trackers: It's hard to stay on top of your financial life if you don't know how much you're spending and saving. Budgeting apps like Mint, Mvelopes, YNAB ("You Need a Budget"), Level Money and LearnVest all can help you stay on top of what needs to happen for you to reach your money goals.

Bottom line

To whip your finances into shape, start by recognizing your own preferences so you know whether you'll want to skew more digital or paper in your organizational systems. Then sit down to actually tame all your paper clutter.

Now, you can finally tackle your long-term financial to-dos, like checking your credit report or searching for a new credit card that meets your needs.

About the author: Allison Kade is a freelance writer whose work has appeared in publications including Bloomberg, Travel + Leisure, Forbes, Real Simple, Business Insider, TheStreet, BoingBoing, Fox Business News and more. When she isn't writing about personal finance, she's probably still writing fiction. Or traveling. Or solving -- or creating -- puzzles. Follow her on Twitter.

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