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How to get your finances out of chaos

By Kemberley Washington ·
Thursday, May 1, 2014
Posted: 10 am ET

True victory in keeping your hard-earned cash comes only after you have a handle on your money. For that reason, it is important to get your finances out of chaos.

Month after month, bills arrive in our email, mailbox and text messages. If we fail to put a sound system in place, our finances can quickly get out of order. So, if your bills have gotten the best of you, try these few steps.

Implement a financial system

Creating a financial system is key. Establish a method for bill payment, budgeting and saving on a monthly basis.

First, consider paying bills according to your pay schedule. This can eliminate the headache of having to recall which bill is due when. For instance, if you are paid on the first day of each month, pay all monthly bills on this day. This can both help eliminate late fees and allow you to pay bills in an orderly fashion.

Next, make it a point to budget each payday. This will provide a road map so you can know what you can or cannot afford for the period. Finally, commit to setting up an auto draft for saving. This will ensure you save no matter what.

Create a financial home

Make a home for each financial document you receive. Create a filing system for bank statements, retirement accounts, insurance documents, tax returns and other pertinent information.

If you need to find a document, you will know where to locate it. In addition, this can help you save both time and money during tax season.

Prepare a bill calendar, or go auto

Create a bill calendar or a checklist for your bills. Keep a list of what is due on a monthly basis. Do not forget to add bills that may occur infrequently, such as insurance premiums that may arrive on a quarterly or semiannual basis. As each bill is paid, check the bill off your list.

In addition, consider setting up auto pay for most bills. That way, you can pay with little to no effort.

Kemberley Washington is a professor at Dillard University in New Orleans and a certified public accountant. 

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