Tag: Tips

Get Organized! Week Two

It’s Time to Get Organized!   Create a financial binder to keep important papers all in one place.   The binder is a quick way to help you pay attention to your finances on a regular basis. Keeping files electronically is great, but sometimes it is nice to just grab a binder and flip to the page you need!

We get what seems like a million pieces of paper each year.   It is easy to get overwhelmed by the piles of paperwork on the counter.   One of my quick go to methods to organize papers is to use three ring binders.   There are several products I use and love and I am linking them below, but you can use what you have on hand or keep an eye out for sales.

I put together three ring binders for many areas of my life.   Binders are cheap and I buy them whenever I see them on sale.   At a yard sale or thrift store they often go for as little as fifty cents each.  I mainly use all white binders because I prefer the clean look and can dress them up with a slip-in cover page.   You can create binders for many areas such as:  health files divided by each person in your house, a binder for pets with all their records, one for each grade level of your children, a family emergency binder, kitchen recipes, warranties and manuals, vacations, and a binder for financial papers.     For the financial binder, start with a 1 ½ ”or 2” binder that has a slip in cover page where you can insert a copy of your emergency savings tree printable or your index or any cover page.    

In addition to a three-ring binder, I use the tabs numbered 1 to 10 (you can buy tabs in more or less numbered versions).   Get these at an office supply store or Amazon. Right now Amazon has a great sale to buy 6 sets for under $10, and once you make this binder, you will want to make other binders!   These numbered tabs come with a handy index page that you can write or type on, or use a label maker (I love my brother p-touch label maker, it often goes on sale near Christmas and back-to-school time) But I often just use a spreadsheet to create my own index page. Some examples of categories you might use to label the index page of your tabs are below.

Grab this free printable for the index page above!

If using these tabs for your financial documents binder, below are a few financial papers to place behind each tab. I will be writing about many of these items in the coming months, so if you don’t have them now or know what they are, stay tuned.      

Tab 1, a copy of your overall financial net worth statement

Tab 2, a printout of your monthly budget plan

Tab 3, a listing and detail of all your debt and your debt snowball plan 

Tab 4, print out copies of your 401K quarterly statements

Tab 5, sign up at ssa.gov for your annual social security report and put the most recent copy in the binder every year 

Tab 6, any bank or investment records

Tab 7, a copy of all your insurance policies:   Car, Home, Life, etc.  

Tab 8, a few of your recent pay stubs, and your most recent year end W-2 statement 

Tab 9, is for any important information such as a list of all credit cards, bank information, mortgage information and contact information for all your financial accounts to name a few

Behind tab 10, your most recent credit reports 

As you make this book, you may have different or additional categories to add based on the financial papers in your box from week one’s post. I have college funds for my children, and I might add a tab for college planning.   As your binder gets too thick, transfer some older papers out of the book into an archive binder or start a new separate book.   For example, a spinoff binder might be for retirement planning only.    

I also like to place a business card sleeve in the front of my binder to slide in any business cards of financial contacts you might have such as a bank manager, an investment broker, a mortgage company, etc.    Additionally, I always have a few of these plastic sleeves in case I don’t want to hole punch a paper, or if the paper is a different size than your binder and you need to fold it.  

Once you have your binder, tabs, and index sheet, grab a three hole punch, go through your financial records and start placing documents behind the appropriate tab.    Make this financial binder work for your personal situation; it will continue to evolve over the years.  I like to finish my book off with a label on the spine.   Always place your labels on so that when the binder lays flat, you can read the label.    

I keep these binders in a dish rack like this one to keep them standing upright, in my home office, or on a nearby bookshelf.   You want them to be handy so that you can grab them at a moment’s notice to look up a loan number, see what the debt snowball looks like, or get a phone number for your mortgage company.   

Keep any important papers in your financial binder to have them all in one place.   It makes for quick and easy access of your finances.  As you begin using the financial binder, you look at and pay attention to your finances more often. Keeping files electronically is great, but sometimes it is nice to just grab a binder and flip to what you need!   

Disclosure: If you purchase anything from links in this post or other Jump Rope Finances blog posts, I may receive an affiliate commission. However, I only ever mention products I love and would recommend whether I was being compensated or not. Thank you so much for your support of Jump Rope Finances.

 

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Get Organized! Week One

It’s Time to Get Organized!  Create several systems to keep track of your financial paperwork.    There are many systems out there, from file folders to financial binders to digital organization.    Try a few out and see what works best for you on a consistent basis.  Areas to organize include paper bills, electronic bills, long term paperwork & general financial life organization.   

The Scoop:  We get what seems like a million pieces of paper each year.   It’s easy to get overwhelmed by the piles of paperwork that accumulate all throughout the house.   So, for the next few weeks, I hope to post once a week to help you get organized.    Take what you like, and leave the rest, but keep checking back weekly.  

Week One:      Gather your financial papers

Week Two:      A Financial Binder

Week Three:  An Electronic Organized system

Week Four:     Keeping track of bills and a file system for paid bills

Week Five:      Papers files or Scanned files?

Week Six:        Create a lock box of important documents

Week One:  For this week, start by finding a cardboard box and begin pulling together all your financial papers and records in one place.  Just open the box and toss in the information.  Having it all in one box rather than scattered around the house will help in the next few weeks putting together a financial binder and organizing system.    If you have all your documents electronically, start pulling them all together in one file folder on your computer called Finances, plus the current year.   Example “Finances 2020”.  

A quick list of items that come to mind are: 

  • Copies of your tax returns
  • Bank statements & credit card statements
  • Insurance policies (car, home, life, health, etc)
  • Last Will and Testament, Living Wills and relating documents
  • Pension, 401K, Retirement and Social Security statements
  • Paycheck Stubs and work related files
  • Investment account statements & related papers
  • Credit Reports
  • Outstanding Loan documents
  • Lease or mortgage information

Pull together things that you know you should keep in a safe place and that you could get your hands on in ten minutes if needed.

Up next, creating a financial binder. 

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April Finance Tip

The Scoop:

As we near the two-month mark of COVID-19, I want to share a few questions and answers to some financial questions you might be asking: 

Should I continue to conserve Cash?

 Yes, continue to stockpile your cash.   The economy is going to take time to rebound.  Getting back to work, back to full pay, and back to normal will take a little time.    In fact, I’ve recently heard financial gurus talking about not paying your credit card in full each month.  Instead make the minimum payment to put more cash in the bank if your emergency fund is a little skinny.     In the past this was a huge no-no, but now it makes sense to consider.    If you have less than four to six months of expenses (not salary, but your actual monthly expenses like mortgage/rent, utilities, gas, minimum loan payments, groceries, etc), think about cutting back to pay only the minimum on your credit cards to build up cash-on-hand.  

What should I do with my Stimulus Check? 

  • If you are struggling for basic needs (food, shelter, medical) use the funds to take care of your immediate needs.  
  • If you don’t have four to six months of expenses (see above definition) in a savings account ready to access tomorrow if needed, your stimulus check should go straight to the savings account.  I know savings accounts are basically paying zero interest but if an emergency hits, you have it covered.  
  • If you have basic needs and four to six months emergency savings covered… I would still be conservative and put most of the dollars in the bank after catching up on outstanding bills.   You can always pull it out and pay down debt, buy that new couch, etc. once this crisis has passed.  

What if I am still employed, still working full time, maybe from home, and keeping up with all my expenses?   

While this is great news, it could still change.   Many companies are just barely holding on.   If there is a surge or if your state opens too quickly, we may see a second round of layoffs.     Recently there was news that some layoffs may last longer than initially anticipated, and some companies are now closing permanently.     So, chin up, but keep looking for ways to cut your expenses.   My husband is on a reduced work week, and we made the decision to temporarily halt our flexible spending dependent care and health savings accounts.    This has put a few hundred dollars back in our pocket each month.    It may not be ideal to stop these accounts permanently, but for now we feel better about having more cash on hand, not knowing what the next few months will bring.   Where else can you save money?   What can be renegotiated, postponed, or delayed? 

Can’t I treat myself?

We continue to shelter in place and things are slowly starting to reopen in some states.  We have all been housebound and relying on Amazon, Target, Home Depot and the local grocery stores for all our needs and the thought of actually shopping, in a store, for non-necessities sounds downright exciting!  I don’t want to rain on your parade, but this is not the time to go out and spend cash to celebrate.   If you must treat yourself, make it small:  dinner out, a trip to the ice cream store, a bouquet of flowers for your table, a new book, a saw blade for your tool bench, Spring pillows for your couch… you get the picture.        

Should I continue to leave my 401K and investments alone?    

So last month I confessed I had not looked at my financial position at all.    The stock market had been diving, and I knew my investments, retirement accounts and 401K were probably way down.   I said I was staying the course, so there was no sense to look and worry.   I stayed put, I let it be.  I continued to invest in my 401K.   Remembering we are in it for the long run, and the market will always go up and down.   If you pull out when the market is down, you lose out when it goes up again; and IT DID start to go back up!   In fact, in late March, there were multiple reports that the stock market had its largest one-day gain since 1933.   The market continues to experience up and downs, but I’m not changing my position of leave your 401K alone.    Even if your company drops its match this year (which we will start to see as companies look for ways to survive), keep contributing… it’s like the market it is on sale now.   So, continue investing at these great sale prices!

Hang in there…

We will get through these times.   If you are in a good position, consider donating your time or money to help others.   You can help in small ways;  by writing a quick note of encouragement, reaching out to a neighbor or elderly person to offer your support or just to say hello. You could, write a message of hope in chalk on your driveway or put a heart in your window for others to see.   It feels good to do something and bring a little joy to someone’s day.        

March Finance Tip

The Scoop:  

I am working on a large post about organizing your finances but thought I should first do a quick post about the coronavirus.   These times remind me of a speech I gave a few years ago to a local organization about navigating your finances during a job loss.  I think a lot of those same concepts apply.  

On top of the coronavirus issues going on around us, some of us may be laid off, having to stay home with children or between jobs right now.   But even if you are at home, there are still some smart tips you can take with your money.

  • First of all, don’t panic!   – In most cases, this is a temporary situation and we will recover.   Stay calm, keep a good attitude and look at this as an opportunity to get your household and finances in order. 
  • Conserve Cash – Think of this time as a time to save a little more.    Without going to work each day, you might be already saving on coffee, lunch money, parking fees, gasoline, etc.  Now, many stores are closed, and you may be housebound, so use the time to get caught up at home reading, organizing, binge watching movies and completing those many house projects.    Stay away from extra credit card debt.    Stay away from things you don’t need on the internet.    Instead, stockpile your cash.   Get excited about not spending money.  
  • Call your lenders – If you are in a tight financial position, call your lenders and see if they are offering any leniency due to the coronavirus situation.   Some are allowing you to defer payments if needed:  student loans, mortgages, car payments, utilities, credit card payments and others may allow you to defer during this time.   Defer means that you are delaying payment until some future date.  If you still have a job and can do so, keep all payments on schedule.  Remember, this is a deferral, not a forgiveness of the debt. 
  • Don’t Hoard – My state is on a lock down, but before this was announced, I found myself stockpiling supplies.   Two bags of dog food, five boxes of cereal, six loaves of bread, and enough canned goods to overflow the pantry.    I was plowing through money each time I went to the store.   One day I went for milk and while at the store, I spent $160.00.     Stores are not closing, there is no shortage of the things I need, and if there was, I know I could put out an S.O.S. and friends would share out of their supplies.    So, I’ve made the choice to stay out of the stores, shop with a list and not buy into the panic and hoarding.     I have enough, and you probably do too.   
  • Let It Be –   I want to confess, that I have not looked at my financial position at all this month.    The stock market has been diving, and I know my investments, retirement accounts and 401K are probably way down.   I’m staying the course, so there is no sense to look and worry.   I’m staying put.   I am going to let it be.  I’m continuing to invest in my 401K even in these uncertain times.   Remember you are in it for the long run, and the market will always go up and down.   If you pull out when the market is down, you lose out when it goes up again; and it will go back up.    Just let it be.   
  • Stay Focused – Keep a schedule and keep yourself focused and busy each day.    This is a time to gather your financial ducks all in a row.. stay tuned for the financial organizing posts coming soon. 

In job loss, (and now in the coronavirus situation) one of my best tips is: “don’t choose a long-term solution to fix a short-term problem.”  Sure, we are going through difficult and unprecedented times, but this too shall pass.  Don’t overreact financially.    Don’t sell your stocks, don’t cash out your 401K, don’t make rash financial decisions amidst all the uncertainty.    Breath in, know we are all in this together and just take it day-by-day.   Concentrate on what you can do, and this too shall pass.     

February Finance Tip

February Emergency Savings Tip

Life happens day after day; the car breaks down, you get an unexpected Doctor’s bill, your hours get cut at work and you can’t make the rent or house payment. How do you handle these emergencies financially?   You need an Emergency Fund of at least $1,000 to $1,500.    These funds should be in a separate savings account.   They should not be touched except for emergencies.      

February Behind the Scenes:      

If you had an emergency and needed $700.00 for a car repair today, do you have the funds without using credit cards?    Many people don’t have funds to handle even a small emergency like a car repair and must turn to a credit card or payday loan.     If you charge $700.00 on a credit card and make payments of $25.00 it will take you 39 months to pay it off (over 3 years) and you will pay a total of $950.00 due to interest.   Having an emergency account, greatly decreases the stress in dealing with these types of emergencies.    

In fact, having an emergency fund is initially more important than paying off debts.    So, find a way to build this up fast.    Make minimum payments on your debt short term to stockpile cash for your emergency fund.   Why is this important?

If you don’t have an emergency fund,

you will continue to go into debt

for every emergency that occurs.    

Keep inspired by using this Emergency Savings Printable.    Print it out and post on your refrigerator, on your desk or in your planner.  Color in each level until your account is fully funded.   Then save this page for your finance binder (more about this next month!) and as a reminder of your journey and the importance of an emergency savings account.    

Want more details:  https://jumpropefinances.com/the-fine-print-februarys-tip/

January 401k Tip

January Behind the Scenes: 

Over the last decade or so, more and more people have become what is called 401K millionaires.    They have socked money away in their retirement accounts and watched it explode thanks to the incredible stock market returns.   Imagine what your retirement years could look like with one million dollars!   Travel, time for hobbies, volunteer work, spending time with family and friends and most of all not having to worry about money.  

I know it seems like a long time away, and you may be asking yourself, why think about this now?   

  • Because on the flip side, most employers have done away with pensions or retirement accounts, so without a 401K your only other options are to continue working or rely on Social Security.   Do you want to be working at age 75 to cover your basic needs?   What about Social Security?    The average social security check is about $1,400 or well under $20,000 per year… for most that is not enough to live your best life. 
  • Because if you start small and increase every year, you won’t miss the extra dollars in your paycheck.
  • Because it feels good to plan for the future and know you have a plan. 
  • Because you don’t want to penny pinch when you retire or have to rely on your kids or family.
  • Because you want to retire early.
  • Because you have time on your side and money grows over long periods of time with steady contributions. 

Just start today… you will never regret socking away a few dollars now that will grow to a huge nest egg over your lifetime.    

Start simply, but simply start!

Want more details? https://jumpropefinances.com/the-fine-print-januarys-tip/