Set Up Financial Files for the Year

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Set yourself up for success with a financial filing system to work with all year long.

Set Up Financial Files for the New Year - Set yourself up for success with a financial filing system to work with all year long.

Last week we talked about our biggest money mistakes. We had some doozies, didn’t we? I hope all you young whipper snappers can learn from our mistakes. Two weeks before we chatted about financial goals for the new year. Between goals and mistakes, we’ve got to get a plan in action for doing better this year.

Now that the hype of the new year is over and tax time is looming, it’s time to get set up for success. Good bookkeeping is part of that.

I hate bookkeeping so I leave it to the last minute every month. Last year I made it a goal to keep better books. I did pretty well making sure that I updated accounts and filed papers on a weekly basis. For awhile. But, then things got busy and I put things off.

I did better than the year before. That’s good. Now, I hope to do better than last year.

As such, I’m setting up files now to help me throughout the year.

Receipt envelopes

You may have a different strategy, but my accountant advised me to save all my receipts for seven years. I used to just toss them into a box and hope for the best.

The last few years I’ve switched to monthly envelopes and that’s helped immensely. This year in the name of saving a tree, I’m reusing return envelopes from bills I pay online. Doesn’t look as pretty, but bills and receipts aren’t, so who cares?

Yearly files and a box for the year

For years and years I’ve been filing important papers under the specific business they pertain to, ie, AAA, the insurance company, etc. This works for papers you need to keep forever, but not for those items that you can ditch after seven years.

Now I have yearly files that are pretty basic: utilities, insurance, etc. with the year marked clearly on them. After I’ve prepped taxes for the previous year, I can stash it in a banker’s box in the garage or closet. Then, seven years from now the whole thing can get shredded and I won’t have to sift through paperwork, hoping that I’m grabbing the right dates to discard.

Bill paying envelopes

There are a few individuals and entities that I pay by check on a regular basis: my assistant, the IRS, the management company of the house we live in. It’s so much easier if I prepare these envelopes with addresses and stamps all at one time so that when it’s time to pay bills, it’s super easy to do so.

Budgeting and stats reporting forms

There are a few forms that I use to communicate financial stats to FishPapa. Printing out a dozen now makes it a little bit easier to prepare for monthly money meetings. We’ve gotten out of the habit again, so this year I need to be more on top of getting ready for this.

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This is Frugal Friday. In an effort to make these weekly financial discussions more interactive, I’m no longer posting a link-up. Feel free to leave a link in the comments. But better yet, chat with us on today’s topic.

How do YOU handle paperwork throughout the year?

Do you do anything special?

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  1. For any readers who have teens like Jessica and myself, one really good reason to keep paperwork is financial aid. If your children will be going to college, there’s a really good chance that you’ll be filing at least one financial aid form. And having good records or files makes life a lot easier then!

  2. So does everyone need to keep receipts and phone bills, etc. for 7 years, or is it just because you have a business?

    1. We’ve always had one of us self-employed, so I don’t know any different. Curious what other folks do. I imagine you would only need to keep 1099s, bank statements, etc. for the 7 years.

  3. I’ve tried so many variations of filing. I finally had a system down that was perfect for me, and then I went and got married ;). With that I have not just double, but rather four times the paperwork. I used to do my taxes simply and now we itemize. We have a ton of things to keep track of. For now I have a filing system that keeps track of: loan information, important documents, titles, insurance, etc. Then I have a box on my desk for incoming mail. I deal with that twice a week. I have a budget binder/ calendar for monthly bills, etc. I have a shoe box for receipts. I know I’m all over the place, and I want to stream line. I’ve tried doing things yearly and it just takes up too much space (MORE than now!!). I think the paperwork is like everything and is a work in progress….

  4. I have a financial notebook.
    It works kind of like the old envelope system for budgeting except you don’t have to cash your pay check, like I the old days, and put your budget aloowance in each envelope. What you do instead is you print a copy of a financial ledger for every category of your budget. My categories are: mortgage, all utilities, all insurances, groceries, gas, baby sitter, gardener, Drs., haircuts, work expenses, children’s sports/other expenses, entertainment, home repair, cars, dog, clothing, debt, vacation money, gift giving, tithe, and savings. THEN, each ledger goes into a page protector in the binder. We divide the monthly income by the above topics. Every time we pay a bill or go to a store it gets written in that categories ledger and we can see whether we are sticking to the budget or where we seem to go over and may need to adjust. Great for communication with your spouse too because together you both get to decide how much goes to each category. Great for kids to see too how to ensure you save, or our ledger says we only saved for 1/3 of our vacation so far. Etc!

  5. I file everything in files during the year and then I do a box a year for all tax info and bank statements.

  6. I switched to paperless filling a few years ago. I scan everything or save files when I’m sent it digitally. Much easier to locate info now. Just have to do backups on computer on a regular basis which you should do anyway. Online bill pay is easy timesaver too. No stamps needed!