More updating of completed stuff plus some new things added in along the way. Back in January, I set out to get the finances in order to make tax preparation (and everything else) easier. Traditionally I was sitting in the midst of paper in April dreading sorting, totaling and organizing so that my taxes would be fast and (relatively) painless. This year, believe it or not, I succeeded. The January goals were:
Finances – Tax Preparation
- File all 2012 receipts, bills, etc. for tax filing. – done
- Shred all unnecessary old records by schedule. – done
- Set up 2013 file folders. – modified
- Save online statements as needed to archives. (No paper) – done
Last year I went mostly paperless. This year I was nearly 100% with the exception of medical bills and I still haven’t figured out a way to get those digital nor do I think I ever will without a complete overhaul of the insurance and medical system. As a result, there was nearly no filing other than to put the supporting documentation for what went on the tax form into the “tax binder”. Every year I start with a 1/2″ binder labeled for that tax year – deductible receipts and “important tax information” goes into it as it is received. What I discovered is that I didn’t actually need the majority of my 2012 folders, nor did I need to set up 2013 folders – I did have to set up a CD to save off critical tax records and put a CD sleeve into the tax folder.
Shredding is always fun, but I’ve been consistently shredding for some time – the key thing is to know what records to keep and what to nuke. Most people keep things that just aren’t necessary. Example – unless you are claiming a home office, why are you keeping your utility bills? Unless you are running a kennel or showing and breeding dogs is your occupation, why are you keeping vet receipts (other than rabies certifications and pedigrees)? I’m down to one filing cabinet and working on emptying it with the goal of eventually having nothing but my safe deposit box, home fire safe and a collection of CD/DVDs with cloud backups.
Truth is – paper is time. You have to organize it, file it, staple it, sort through it, think about it. If no one has asked you for your vet bill from 5 years ago, they aren’t going to – get rid of it. Find an online guide to retention schedules and use it – ruthlessly. Feel sentimental about a piece of paper? Scan it or take a picture. Lighten your load and make it easier to find what you actually need. Free up the time to analyze what you need to do. Paperless is truly excellent – save what you need, let someone else send the reminders (or, if you can afford to, set auto-payments – I do love auto-payments) and focus on how to reduce or eliminate the bills instead of how to store them.
In any event – this goal seemed correct in light of previous years, but turned out to be nothing more than a day of shredding and scanning and an afternoon of filling out, signing and mailing the tax returns. I am setting as a follow up goal for later this year to put each major expense category into a month and use that time to check competitors and analyze bills for ways to save money – I’m pretty sure I’ve not squeezed everything out of my bills yet, though I did refinance and change cellular providers this year, which saved substantial amounts and let me pay off two loans and my credit card balances.
The major long term goals are to make sure that my son can go through college without coming out with massive debt and that I can retire with a paid off house and a living income. And that still needs some work. Like finding about $1000 per month either through increased income or reduced expenses. Which will be the topic of the next post as I start looking for the soft expenses to cut.