I’m done! I finished the curriculum committee report yesterday and then promptly took a nap. When I woke up, I finished the last of our taxes. Once again, I feel like life might be worth living.
This is the latest I’ve ever been with our taxes, and that’s because this is also the most unorganized I’ve ever been. Back in my previous life, when I had careers that involved numbers and law, I balanced our accounts to the penny using QuickBooks. I had an enormous adding machine and special pens and pretty office supplies. These days, all I have is an accordion file and pencils that need sharpening.
Home financial management isn’t pretty, but its necessary. This post won’t give you anything worth pinning if you’re the type of person who likes pretty pictures. But, if you’re like me and covet information and advice, I have a feeling this is a post that will be worth bookmarking. I want to know how you organize your bills, keep paperwork handy for taxes, and stay financially organized.
For example: thermal receipts. They fade. Even when stored in a cool, dry environment, they last about 5 years. I keep all my tax-deductible items for 7 years. My tax preparer told me that a faded receipt will no longer serve as proof of a deductible item. That makes sense, of course, but I don’t want to photocopy every single receipt we bring into the house. I’ve heard good things about receipt scanners, but those cost between $150-$350 for boring in a box. The Mister says there is now a NeatApp, which looks promising, but there aren’t many reviews available.
Surely there’s a way to handle all your finances in one spot? Preferably a spot that isn’t putting you at risk for identity theft? Banking, bills, receipts…possibly the most boring post I have ever written.
Banking, bills, receipts – I hate them for taking so much time but love them at the same time for the organisational possibilities they offer. (Organisation nerd alert)
I checked with my bank and the tax people who all confirmed that now accept receipts scans (that’s in the UK though) so I scanned pretty much all I had, from bills to bank statements, and save them in 3 different places. Just in case one of the backup systems fails (also knocks on wood). For the current tax year, I started keeping an Excel spreadsheet and log in income and expenses for all those receipts. (Excel nerd alert)
If I’ve avoided logging them in for a couple of months it takes a bit longer to get everything in that damn spreadsheet. But if I do it once a month (I try to do it when I get my bank statement and have to go through my card receipts) it’s actually quick and easy. And at the end of the tax year all the numbers and figures are already in the spreadsheet. It was also a huge relief to shred 7 years worth of old statements and receipts – less clutter, and now when I open my accordion file I know it only has current paperwork neatly filed in there. I used to dread that stupid file because it was so heavy and a mix of old and current statements, so I can’t properly express how good it feels to have got to that stage!
I scan everything at work but saw a few people talk about how they take a photo of them and automatically file/upload the pictures in the relevant folders from their smartphone. (don’t think photos of receipts are accepted in the UK though) Or instead of investing in a scanner, could you do that in batches at a copy shop?
All great tips. My husband keeps telling me about the picture thing since that’s what he does for work, but you bring up an excellent point in wondering whether tax authorities accept photos! They only now except scans, so, it’s worth researching.
I’m not an excel nerd. It intimidates me!
Sigh…hand over complete financial management to the other spouse and block it out of your mind. That’s how I handle it, because it was mine for a while and I made a huge mess. I have huge emotional issues tied up with money (which I have not yet been able to figure out). Even reading this post and typing this response is making my chest feel tight. So sorry – no help at all here, but I can ask my husband how he does it and let you know if it’s helpful Although I may have reached my limit on money talk for the day. I do know that, because he’s so much better with money than I am, we just paid off our mortgage very early. Which of course is great, but also means we can’t itemize any more and haven’t for the last few years as we started paying off principal, so paperwork becomes less important.
That’s my dream–a paid off mortgage! Unfortunately, I can’t hand it off to my husband. Disaster would ensue. I know, I hate talking about it, too. Even thinking about entering in numbers gets me all worked up. Apparently, judging by the small number of comments today (this surprised me) I’m not the only one who hates dealing with this crap!
I don’t think your the only one who hates it! If anything (at least for me), I think people find it so overwhelming and hard to organize well that they are just waiting for you to gather the info and create an awesome system. Then hoping you blog about it saving the rest of us from drowning in paper. ;D
We use a spread sheet for our budget(different tabs for different accounts, categories for different budget items but not as many as Quickbooks.) All taxes are filled electronically (almost all forms can be downloaded now.) and saved as a pdf when complete. We still mail in hard copy as the electronic filing hasn’t quite caught up to non standard filings (had hopes for it this year) I download bank statements monthly and important receipts are scanned on a flatbed scanner. Copies of everything are backed up and also kept in Dropbox. Most bills can now be downloaded even if you get paper copies.
Oh my gosh. You are so organized.
My taxes are easy. I don’t have a reason to save a ton of receipts. I don’t have any dependents. My out-of-pocket medical expenses don’t generally exceed $50 in a given year. I don’t have kids so there are no childcare expenses. I don’t have any employment-related expenses and I haven’t made any large purchases since the house.
I have two filing systems: physical filing & digital filing.
Digital: Donations & Volunteering. I save online donation receipts in an email folder. I track both nontaxable and taxable donations on a spreadsheet but the taxable ones are noted. I don’t ask for a receipt for cash donations so really it’s just the online donations or checks. I track volunteer hours & mileage on another spreadsheet.
Physical: I have a clear single-pocket wall file mounted to the inside of the cabinet where we store the long-term financial binders. The concept is to have the current month’s paper bills/notices in that plastic pocket. The other concept is to go through that month’s worth of stuff when I go to throw the next month’s stuff in. This concept doesn’t work. The plastic pocket gets full of utility bills and bank statements and I go through it when it’s too full. I only keep utility bills a few months back since I can easily access a copy of those by contacting the company. I keep bank statements for a year but I have no idea why. I really only need the final statement of the year for tax purposes. The binders hold paperwork that I’m pretty sure we need to hold on to. Some of it is warranty-related. Some of it is car-related. And some of it just seems like something we should hold onto but again – I’m not sure why. We have 4 binders so far.
” This concept doesn�t work.”
Oh, I laughed and laughed and laughed when I read this.
I hear great things about GeniusScan – a smart phone app that turns pictures of receipts and other important docs into pdf or jpeg files.
I cannot say enough fabulous things about LearnVest.com. I love it. I finally got a handle on my spending. Not saying I don’t ever go over budget, but at least I know what my budget is and I KNOW where every dime goes each month. It takes about 5 minutes a day to log in and file your charges into the various budget folders. You can make the folders whatever you want them to be, so you could file things by house, business, by tax purpose. You can set up priority money goals, which could be paying something off or saving a certain amount. I just LOVE it. It takes all the stress out of managing your money. It even tracks your net worth, so you can see it go up each month :-) You link all your accounts to it, including 401Ks, savings account, credit cards, your morgage, your loans, everything.
However, that doesn’t solve your paper problem. Sorry! I don’t own my home, a business or have a family, so my paper storage issues are very small indeed. Everything from like the last 15 years easily fits in an accordion file box, as most of my stuff comes electronically. I don’t receive a single paper bill; everything, including my bank statements come electronically. I don’t even need to save the emails because I can access them all on the utility or bank website.
I have our statements sent electronically. I used to have all our bills electronically sent, too, but for a very brief time 5 years ago my husband took over the bills and he had everything sent paper because he is paranoid (hence the Mister) and convinced identity-thieving monsters live in the computer. I swear, he’d have his paycheck delivered by mail if his company would let him do it. O_o
I’m intrigued by this LearnVest.com. I’m checking it out. Also, I’m going back to electronic bills. There’s no reason why I’m still receiving paper. It’s not like I can write off an electric bill.
Yeah for electronic bills! I go even one step further and have all my payments automated. I am terribly absent minded and this keeps me from forgetting a payment. When the email alert comes in I look at the total, and if its in line with what I normally pay I move on. If the number looks odd, I go to the website, look at the bill and then deal with complaints or questions I may have. Makes things so much easier.
And I can sing the praises of LearnVest all day long. It’s geared toward enabling and encouraging women to take control of their financial lives, but I think its great for men and women. They actually offer financial planning services that include budgeting help that are very accessible for non-rich people. I am fortunate that my mother’s financial planner talks with me once or twice a year as a freebie for my mom. And because you sort your expenses by folder, its so easy to see compare month to month how you’re doing in a particular expense catagory.
I’m not techie person, but I bank online with USAA. I hear great things about ING online banking as well. Your brick and mortar bank’s website probably has all kinds of apps and tools to help you out. Take a look at it.
Good luck with all the tax related receipts! And even if you could write off an electric bill, you could always just print it off the utility’s website :-)
And apologies for this super long comment. I get very enthusiastic about people taking control of their financial lives!
I HATE all the paper that comes into the house pertaining to money — receipts, bills (from old-school companies who refuse to go online, or who have weird rules and send me an e-bill AND a paper bill), tax statements, etc… When combined with school work, field trip notes, donation requests, junk mail, and team sports information, it’s enough to make my eyes bleed. I tried to turn the financial stuff over to my dear husband, but we discovered it does work better if he brings in the money, and I send it all right back out into the world. (Sigh.)
Here are two “tools” we do use to make things a little easier. There is an app called OneReceipt, and I just take a picture of every receipt we get. I am not a tax professional, so I don’t know if this method would be IRS-approved, but it sure makes things feel a little less hectic. Even though it is on my phone, my husband assures me the receipts are also stored “in the cloud”, which evidently means that a lost/broken phone does not mean you lose all the documents. Or something.
My husband also has a Simple account. Evidently, you must be “invited” to join, but it does seem to be more streamlined than traditional checking accounts. Whenever he makes a purchase, Simple sends him a receipt via email. I’ve noticed that certain retailers ask if you want a receipt, and with this type of account, you can always safely say “no”. I also know a lot of people are hesitant to trust online banking, let alone banking apps on their smart phone and so forth, but dear husband is a technology architect, and has worked closely with all kinds of financial institutions. He knows first-hand where the security flaws are (and aren’t), as well as how to mitigate risk — so if he trusts Simple, I do too.
For all my other tax receipts and documents, I pin them to a bulletin board throughout the year, pull them down in January, and start over again. Not very pretty, but it works well enough.
Sorry for the long post. Hopefully someone can use the info!
I’ll look into Simple, even though it’s invite only. I’ll also show this to my husband–one of those who fears online banking–and let him know that your husband seems to think it’s safe.
Most of my bills get to me online and get paid online and I get email confirmations. The only one that doesn’t at least get duplicated in ebill is the rent and I scan the bank receipt into Evernote. Right now my only real expense is PayPal fees and I do most of my tracking in an Excel spreadsheet.
I keep hearing about Evernote being the best thing since sliced bread. And yet, I can never grasp the concept! I keep resorting back to pen and paper. I’m such a slow adopter of technology when it comes to some things.
We do almost everything electronically. I hate being weighed down by physical clutter. We have very few receipts or statements (almost all payments, banking, charitable donations and business expenses are done online primarily because we live abroad) so I just save PDFs and jpegs of everything in a separate folder for each tax year. If we had more physical receipts I would scan them to save them. Never know when we’ll move again and how far so better for us to live as minimally as we can.
As for security, we use multiple backup hard drives and Time Machine to make sure we don’t lose anything important, and we use 1Password to protect our online identities.
I don’t know 1password, so I’ll look that up. Thank you! You’ve all inspired me to switch back to ebills.
So this is my favorite area of organization. (I’m a nerd who worked as an accountant before becoming a stay at home mom). I have a binder that contains our budget, statements from investments, a folder to hold any paper bills until the twice monthly payday, and a folder that holds any tax receipts. Because our tax return has pdf files of all source documents, I toss the originals once the tax return is done. If you are someone who uses a lot of receipts for tax prep, I recommend setting aside a day each month and scanning them – boring in a box has advantages.
To keep things even easier, a majority of our bills and taxable donation receipts get sent to a special email and those get saved to the appropriate computer folder. I also have ton cover all the bases and say, if you do decide to go the PDF electronic route,, BACK UP BACK UP BACK UP.
Also running spreadsheets are my favorite. Any itemized deductions (med expenses, charitable donations) I add up at the end of each month. At the end of the year, I just total them up and I have my total for my Schedule A.
Ugh. Can’t I just send everything to you and have you wave a magic wand or something?
But then you’d miss all the fun!! :)
I am puzzled as to why you are overwhelmed by receipts. Unless you are self employed, very few expenses (things requiring receipts) are useful for tax purposes. Annual statements provided by your bank, mortgage lender, and employer are necessary and should be filed in a yearly tax file. If you make charitable donations, you need to save a copy of your donation and its acknowledgement. I suppose if you have educational or child care expenses, or enough medical expenses to itemize, those should be tracked as well. All the other bills — electric, cable, water — no need to keep them.
So where are the mountains of receipts coming from? All the stuff you buy in the world — groceries, stuff from the hardware store, clothing, books, music, toys, baby supplies, household items — those things are not useful for taxes. Items with warranties should be filed, but the rest of the receipts should just be thrown away as long as you don’t plan to return the item.
Did I say I was overwhelmed? I think I said I hate to deal with it.
I do have a lot of receipts, though. Perhaps not a mountain, but enough. I *am* self employed, have tons of donation receipts from the William Morris Project, participated in 3 charity drives in 2013 alone, and the amount of receipts I have for the library alone is more than some save for the year.
I just have a folder labeled taxes and the year. Whenever I get a receipt I need to save, it goes into the folder. I don’t even touch it till tax time. I throw away all other receipts and use the mint app (free) to categorize it automatically for our budget.
I never save my Goodwill or Salvation Army donation receipts. I also figure it’s not enough to make that much of a differences in our taxes. Maybe I should rethink that.
So today I am now grateful I do not have to itemize my taxes and the few papers I have to keep (insurance claims, ending statements for retirement and insurance) are relatively easy. Now if anybody has any clue on the mountain of military paperwork I’m keeping beciase I’m too darned scared to throw it away…