Filing System To Simplify Life
Many years passed during which I fantasized about the perfect filing system. One day I acted upon my deepest latent desires and made my OCD wishes come true. For more background, the zenhabits website has a great post about how a filing system can simplify your life and increase productivity. For my system, I got inspiration from Jean Chatzky’s book called Make Money, Not Excuses and followed a system she outlined. The steps are below:
Step 1: Get a small file box with a carry-handle. These are available at any office supply store, Target or any other sort of discount retailer. Or… if you’re feeling fancy or need an excuse to get organized…The Container Store! That’s right, I just gave you an excuse to go there. The reason you want a filing box with a handle is this is basically going to be your portable, frequently updated, current file cabinet. You can bring it out to the dining table to make quick adjustments or bring it to your tax person or CPA when necessary.
Step 2: Get all supplies necessary for organizing and filing bills. I like to keep mine in a sturdy fabric box near my other filing equipment. I’m sure a craftier person than I could have fun making one, but I purchased mine. I have modified the list from Jean Chatzky’s book and it is listed below:
- Hanging folders. Decide early on if you are going to commit to letter or legal-sized for your box and folders. Be sure you have the filing tabs that go along with the folders.
- Sharpie markers. The fine point ones are especially useful. But… what is even better than sharpie markers is… (cue flashing lights and dramatic removal of a velvet curtain)…a label maker. Jean suggests getting one if you have poor handwriting, but I suggest getting one if you really want your filing to be something you get excited about! **
- Manila folders (again, decide letter or legal)
- Stamps and envelopes
- Letter opener
- Stapler (red Swingline if you’re an Office Space fan 😉 )
- Calculator (I love my trusty old TI-83 from high school maths)
- Pens and pencils
- Paper clips
Step 3: Neatly label your hanging folders. (Sweet joy, it’s time to play with the label maker!!!**) I like to use the following categories:
- Brokerage Accounts
- Home (or Apartment)
- Credit Cards
- Health Care
Other ideas for main folders (with subfolders):
- Mom and Dad (or anyone else you’re helping to take care of)
- Lifestyle (examples below)
- Hobby (for example, I have one folder for writing and one for yoga)
Step 4: Populate your hanging folders with manila folders for specific areas.
In each of these main hanging folders, you will want to put a manila file folder for each separate entity of the main category. As an example, for credit cards, I have a manila file for Chase card and a manila file for CitiCard. For Home/Apartment, I have one folder for homeowner’s insurance and one for utilities and so on. Each one gets labeled with the year because when the year is completed, you will move this folder out of your pristine carry-handle box in to a non-portable file drawer. Eventually it will become obvious which large categories you need and which manila folders you need.
Jean recommends having different color folders depending on if it is yours, your spouses, or shared. Right now Chief and I have all our accounts separate so I have made a portable filing cabinet just for him. I color code by whether things help me become financially abundant. All my credit card or auto things are in a red folder (bad!), brokerage and banking in green (money, good!), and neutral things like home or hobbies in yellow or purple.
In Chief’s filing box, I have a folder entitled “Children” and a manila folder for each of his kids. In those manila folders, you can save things like important milestones, report cards, and some of the best or most meaningful artwork. It will then always be organized by year.
Step 5: Once a year, transfer the previous year’s manila folders from the portable box to the non-portable drawers.
When the end of the year comes, I then change over my whole file system and throw away anything that can be dumped. For all the main categories, I have a matching hanging folder in a larger non-portable wooden file cabinet. Once I’ve filed my taxes, I throw out anything in the main file cabinet from the previous calendar year that I no longer need. I then move the recently completed year’s manila folders in to their hanging folder in the floor cabinet. Next is producing new folders for the new calendar year. (Label Maker Time!**) As an example, as I changed over a couple weeks ago once all my taxes were submitted, I shredded all the Chase credit card 2011 statements I had been storing, moved the Chase 2012 manila folder in to its hanging folder in the main file cabinet, and created a Chase 2013 manila folder in my portable system. Some of your hanging folders will have multiple manila folders from previous years. As an example, your taxes hanging folder will probably have seven previous year’s worth of tax returns in it.
I leave the stuff I don’t need for everyday in my main file cabinet (e.g. old tax statements, medical records, art and furnishings paperwork, divorce papers, and miscellaneous invoices and receipts).
It sounds like a lot of work and initially it was. Now that I have my system up and running though, the switcheroo only takes me about 3-4 hours once/year. I usually do it as I watch mindless movies over Netflix on my computer.
Staying on top of this requires short bursts of weekly or monthly maintenance and one committed evening of annual maintenance but the peace of mind it brings in having organization and knowledge of all your important records is immeasurable.
In regards to which things you should keep and which things you should toss, I have a list of guidelines that I have taped underneath the top of my portable filing cabinet I typed up the list based on the guidelines in Ms. Chatzky’s book. The link to download the PDF file is below. I do recommend checking out her book if you want to become more financially savvy. She has some great advice on how to divvy things up whether you are a one or two-income family, some basics on investing and planning, and how to get more control over your finances if this is an area you feel insecure or worried.
** For those who get excited about things like label makers, read on:
There is endless fun to be had with label makers and it brings such a sense of peace and organization to my life. One thing I will mention is that you want to be sure you get label tape that isn’t clear (in case you need to cover old writing up) and stock up on the label tapes while at the office supply store because it’s really annoying when you run out at the wrong time. I keep a photo of the kind I like on my phone as well as a photo of the printer cartridges I need because I can never remember when I am at the store. The label tape is expensive so this part is really kind of extravagant and is to get you excited about filing more than anything! My label maker even has a key to make a cat face which was a real bonus. Though it’s possible others don’t get quite the thrill out of label makers as I do??