Monday, December 28, 2009

Going Paperless With Your Financial Life

The following is a guest post by Revanche of A Gai Shan Life. It is one of several guest posts that I am publishing as my family and I are vacationing in Costa Rica. Original Shadox posts will resume after the first of the year. Here is the post:

As I dug around in my desk drawer hunting down my checkbook, I reminisced that this time two years ago there would have been no question where it was. I always had it at hand, and was constantly making notes in it. Now, *dig dig* I know where it lives, but it so rarely comes out that it gets buried way in the back. It’s a nuisance, but a startling reminder of how completely my organizational and financial system has changed in such a short period.

For the past several months, I’ve been laboriously scanning and shedding paper waste, either shredding the identity-rich documents, or using the safe junk documents as printing paper for my couponing. My filing cabinet used to be jammed tight with those thick expandable green folders, part accordion, part pronged. Oh, the paper cuts! Going paperless called for a hulking 18-lb All-in-One (my review here), but as it serves to reduce the overall clutter in my little office area I’m at peace with it. At least ten reams of paper have been removed from the system – no small beans!

I’ve always managed banking online, but integrated up to 95% of my financial life online this year. All paper statements have been canceled in favor of emailed PDFs or online access with a quick click or two on each institution’s website. Even checkwriting has gone online, thanks to ING Electric Orange, which means that I can very easily verify that payments have been made online at a moment’s notice (and given free wi-fi!). I still have the checkbook for the occasional purchase, but just carry a single check with me when it’s needed. No sense in putting the whole checkbook at risk of theft or loss.

Of course, all this automation requires a little more in the way of techie doodads for security purposes. I have a Maxtor One-Touch external hard drive where all my records are backed up and safeguarded by passwords. I highly recommend getting at least one form of back-up if you have any significant amount of data on your computer, two if you’ve converted entirely because even your back-up can become compromised or damaged.

Seven years ago, losing the contents of my old laptop was annoying, today it would be disastrous.

I’ll concede that going paperless is kind of a painful process at first, especially if you don’t care for cleaning. There are some great resources online for creating an organizational system that works for you, but I’ve found that the most effective piece of advice I could ever give to someone looking to go paperless is just get started. Pick a pile and start there.

Fabulously Broke has a unique naming convention, while I prefer to use a nesting strategy by categories, like Records > Investments > Vanguard/Treasury Direct/TradeKing > 2009 > Statements.

There are days I’m just not in the mood for it, but when a pile is starting up I’ll just grab a sheaf of papers, scan and discard them. I’ll come back, rename and file the PDFs later. It’s ok not to be perfect in the process, so long as you do a little bit regularly to keep the piles from forming.

Even with the small inconveniences like keeping track of longer lead times on sending check payments, I’d highly recommend going paperless with your records. It’s quite a lifesaver come tax-time because I’ve already organized all my tax-related receipts during the year!

[Shadox - ohhhh, if only I could bring myself to take this advice. Alpaca and I have PILES AND PILES of paper records. Alpaca in particular never throws away anything. You want to see a record of our July 1999 electric bill? She can probably dig it out for you... ]

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Allen Derek said...

Inconveniences are not that full to be small. Inconveniences are so much more sufficient

FB @ said...

The Categories are a great idea, I am just too lazy

Hence the extensive naming convention, so I can throw it all into one folder instead of having to keep clicking down to the end

:) Thanks for the mention!!!

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