Strategy #3: Establish a bill-paying routine.
It's important to organize your financial records and have a consistent process for bill-paying and recordkeeping. Here are some suggestions to keep you on target:
- Set up an in-box (even if it's just a shoebox) for your current bills. When you receive a bill, write the amount due and due date on the outside of the envelope and file it, chronologically by due date, in your in-box. You can also record bill due dates on a calendar or monthly planner.
- Pay bills once or twice monthly. Always pay them by or before their due dates to avoid late fees. After paying a bill, file the appropriate receipt in a "paid" file folder. If you can't file records right away, start an out-box for items to be filed, then file once a month.
- Only keep necessary records and receipts. See below.
What records or bills should I keep and what can I throw away? According to financial experts, some records should be kept forever, such as your birth certificate; Social Security card; marriage/divorce records; legal agreements (like an original credit card agreement for as long as you have the card, mortgage and loan agreements); home improvement receipts; current insurance policies; tax returns; warranties.
Other records should be kept for one to three years, such as canceled checks; bank statements; store receipts.
Some things can be thrown out immediately, including paid phone and utility bills (unless used for tax deduction purposes).