Why Organization is Your Best Friend

There is nothing more important in personal finance than organization. Knowing where your money is going is key to meeting your financial goals. 

The first step is to know how much you are spending. My suggestion is to take one month and track where your money goes. Don't cut back in this month. Your goal should be to make an honest assessment of your spending habits. 

Next (or at the same time) you should be gathering information about all your accounts. If you are comfortable with it set up online access so you can see your accounts in real time. Consider using Quicken Online or Mint (both free services) to manage your money. 

Use the information you gathered from tracking your spending to make a budget that works for you.  If you are trying to cut back do so in stages, going cold turkey only works for a small minority. Most importantly make sure what you are spending matches up with how much money you have to spend. 

Some of the benefits I've found are:

• I've stopped incurring overdraft fees.
• I know where my money is going.
• There are no more surprises on my credit card. 
• I always have the money to pay off my credit card at the end of the month.
• I save money every month (and pay off debt every month).
• I have a real sense of control over my finances. 

You don't have to be super organized or type A to find a system that works for you. Some people use cash set aside in envelopes or money jars, others let programs like Mint and Quicken do all the tracking. The only thing that matters is you find a system that allows you to know where your money is going. And remember organization is your best friend when it comes to your money.