10 Steps To An Organized Financial Life

Some people might argue that getting financially organized is similar to living a healthy lifestyle. We all know what it takes to stay healthy – eating right, regular exercise, and avoiding stress. Yet it’s an entirely different challenge to actually do something about it.

The same is true for taking steps to an organized financial life. We know the things we should be doing, yet it’s challenging (to put it nicely) to put into action.

If I had to guess, I bet one of the top reasons it’s hard to get started organizing your finances is because it seems so overwhelming. There are multiple accounts that need to be monitored, apps to download, and statements to check. Don’t forget all the documents which need filing. Wouldn’t it be easy to have a step-by-step checklist of items you need to achieve an organized financial life?

The idea of an easy reference is what inspired the following list. I put together 10 steps we need to take to get our finances organized. Sure, some take a little more time than others. But all the steps are designed with one goal in mind – getting your financial life in order so you can focus on your medical career. 

Here are the steps that I not only recommend to get organized, but I personally use these techniques in my own home. 

1. Organize Your Snail Mail

You probably thought I would start off the list with items directly related to banking. But I believe getting financially organized begins at the mailbox. Yes, even in today’s digital world, we still have to deal with mail. Most of it is probably junk, but occasionally you receive something which needs your attention. 

Subscribe to the Financial Residency PodcastLet’s review a familiar scenario. You come home, check the mail, and throw the stack of envelopes and junk mail on the counter. You then make an empty promise to look through it later and make sure there’s nothing too important. Not surprisingly, the mail continues to sit, waiting patiently for your review. 

Yet somehow it never gets looked through. It just sits until you need to dig through it to find the one item you actually need to retrieve. You spend more time working through the pile and trying to find the important paper you need. I’m sure you get the point.

If you want to get your finances organized, you need to start with the paper entering your home. No matter how exhausted you are from your long shift, it will only take a moment to purge. Grab your mail every day and quickly decide what should stay or go. Chances are, most of the paper in the stack can go straight into the recycling bin. 

Now that you have the junk out of the way, you can see if any mail needs a follow-up. The important items need to be filed to their designated place, where you will know where to find them later on.

My wife and I have a system where she checks the mail each day. She then purges the junk mail right away (how many pizza coupons does one family need?). Next, she takes the mail which needs a follow-up and puts it in my office. We have multiple “inboxes” – one for urgent mail and one where the response is needed within the month. From there, I can easily review and we know exactly where everything is located. Luckily, we don’t receive too many urgent items through snail mail, so it doesn’t take long to file what needs to be reviewed.

Once the mail has been responded to, it gets filed in the appropriate place.

It may sound basic – and the reality is it’s very simplistic  – but it keeps important items from slipping through the cracks. It forces me to be more organized. Otherwise, the mail would collect dust on the dining room table.

2. Organize Your Inbox 

If paper is a cause of clutter in your life, then I know email is even more of a nightmare for you. Communication via email has become a normal way of life. And just like the pesky junk mail which sits in our mailbox – the same goes for our inbox.

An easy way to achieve a more organized financial life is to get your email inbox under control. Are you one of those people who has thousands of unread emails sitting there – looking at it almost like a badge of honor? 

Most likely your massive inbox causes you to waste time searching for important information. Even worse, you feel anxious when you open up your email because you have no idea what needs a response and what’s junk.

Getting your inbox under control has several benefits. There are lots of tricks to organizing your email but let me tell you about the system I personally use. 

My personal email is organized into four categories: Needs response, needs review, awaiting response, and everything else. 

The categories are pretty self-explanatory but I find it super helpful to keep me on track. Once I respond to something from the “needs response” category, then I simply file it away into the folder it belongs to. That’s it – nothing magical or complicated. But it definitely keeps me from getting behind.

I encourage you to take it a step further and unsubscribe to the promotional emails you never read. Not only do these emails tempt you to purchase something you probably don’t need to spend money on, but it’s one less email for you to have to go through.

3. Organize Your Documents

Once you’ve responded to your emails and paper bills, it’s time to file the important items away. You may be wondering what the best filing system is for your home office.

Manage Your Finances Like a BusinessThe best filing system is the one that you remember to use and it is easy for you to locate items! Generally, you want to keep separate folders for all of your financial papers. Within the financial files, make sure to file your records related to taxes, your personal and retirement accounts, and insurance policies.

Then you should have a separate folder for any legal documents you need to keep records for. This includes information related to your estate planning, passports, birth certificates, and all other important legal items.

Don’t forget to file all the information related to your student loan debt. There’s nothing more frustrating than not being able to easily locate this paperwork when you’re trying to make decisions about your medical school debt.

Once you have everything in place, make sure you have a backup system. This could be taking pictures or scanning the items into a cloud storage system. You never know when you could lose the physical copies of your files, so do yourself a favor and create an easy backup.

Lastly, make sure you have a naming convention for your files which is easy for you to remember and other people to access if necessary. Come up with labels so someone else could find the info in case they needed to.

Again, it may sound basic, but with a little bit of thought and a few file folders, you can create an organized financial life. A life where you can easily access all your important information quickly and without hesitation. Imagine the amount of time you and your family will save by having such important info right at your fingertips.

4. Create a Joint Account with Your Spouse

Those of you who are married know how challenging it can be to discuss and manage finances together. And being married to a physician adds extra complexity since your schedules are erratic and you don’t always have time to go through financial details.

One of the easiest ways for you to get more organized is to go ahead and combine accounts with your spouse. I know this is a subject that is heavily debated by financial gurus. Truthfully, it doesn’t have to be super complicated. 

You can streamline things and get more of an organized financial life by running all your bills and expenses through one account. Think of a joint bank account as a way to keep your payments more organized. 

Let’s be honest with each other – do you really need one more thing to keep up within your hectic life? Do you need one more password and account to memorize? If for no other reason, having a joint account with your spouse for all your expenses makes it easy for you to keep expenses in one place.

5. Use a Budget as a Tool

I personally think the absolute best way to achieve an organized financial life is to utilize a budget every day. If you want a way to look ahead and stay on top of what is owed, then a budget is essential. You also need a budget to help you achieve your financial goals – both short and long-term. 

I’m sure some of you reading this are frustrated at the thought of a budget. It’s one more thing to keep up within our cluttered minds. But a proper budget will help you stay financially organized.

A quick Google search on budgeting will yield you a ton of results. If anything, there are way too many opinions on different ways to budget your money. I like to keep things simple by applying 5 key principles to budgeting:

  • Write down your short-term and long-term financial goals.
  • Identify categories of spending which are the highest priority for you.
  • Track your expenses to identify how money is currently coming and going.
  • Create a new budget which reflects your financial goals and your priorities for spending. 
  • Eliminate waste from your budget and use the additional money to put towards your goals.

I also recommend setting up a budget using the 50/25/25 rule. What does this rule look like?

  • 50% of your net take-home pay is for fixed expenses (mortgage payments, car payments, insurance, phone, and cable).
  • 25% is for variable expenses (car fuel, electric, groceries or water).
  • 25% is for savings.

Your budget will vary because well, it’s your money. If you’re a resident then your budget will look a lot different versus an attending physician. The important point is the budget will keep your spending organized and make sure your money is working for you.

6. Start Tracking Expenses

Speaking of budgets, you don’t have to be a money nerd like me to keep track of what’s coming in your account and what’s leaving. It’s virtually impossible to achieve your financial goals unless you know exactly how your money is being utilized.

This is true whether you’re a new resident or a seasoned attending physician. You need to tell your money what to do. The best way to direct your money is to track it. 

Hands down my favorite website and app for this exact scenario is Tiller Money. Among the many cool features, you’ll be able to see your expenses in real time. Plus it has the look of a Google spreadsheet which makes it easy to navigate. 

If you can log in to a website, then I promise you can use Tiller Money. You can say goodbye to manually labeling expenses because Tiller will take care of that for you.

Try Tiller Money for your budget management and see how much it helps you achieve a more organized financial life. My guess is it will help you as much as it helps me keep track of my personal expenses.

7. Negotiate Your Way to Lower Expenses

If you’re a resident who is barely scraping by, or an attending physician who is trying to spend as wisely as possible, there’s no reason to overpay for services. There are all aspects of our budgets which could stand to get a little more attention.

One of the best things for an organized financial life is to negotiate your way to lower expenses. You may not think of lowering your bills as a step in organization. But organization involves staying closely connected to your finances. Hopefully you are tracking your expenses each month, or getting ready to begin. But then you need to go a step further in your analysis and see if there’s room for improvement in the amount you’re paying.

Physician Wealth ServicesFirst, you need to list any services you pay for on a monthly, quarterly, or annual basis. Do you feel like you could be overpaying for your car insurance? Are you fairly certain you can pay half the current cost with your wi-fi, just by switching providers?

There’s no reason to put off the phone calls or emails any longer. It doesn’t hurt to ask each provider if there is something you can do to receive a more competitive rate.

Write out each service provider and your approximate bill amount. Call them one by one and keep track of any improvement they are able to provide. If you are under a contract, go ahead and add a reminder to your calendar so you can be prepared the next time.

Knowing how much you’re paying for these services (and knowing you’re getting the best rate possible) will help you stay organized. 

8. Know Your Exact Amount of Debt

Hopefully, by now, you have all your student loan information in one place. If not, refer back to #3. 

It’s important to not only understand your student loan obligations but any other debts you owe as well. It’s helpful to set up a tracker where you have your loans, credit cards, and other debts listed out. It may feel overwhelming, but it’s important to be honest about how much you owe.

By having all the debts (including the minimum payments and interest rates) in one place, you can make better financial decisions on tackling the debt. You won’t be able to start a debt repayment strategy until you have the basics organized. 

9. Determine if Refinancing Your Loans is the Right Option

Yes, you have a mountain of student loan debt. You know the exact amount in federal student loans as well as the private loans. Now it’s time to decide if it makes sense to refinance any of your medical school debt. Since you have all your documents in one place, it should be easy to pull the information together to review.

Now you can begin the process of determining the next steps for your medical school debt. Your path for federal student loans will most likely look different than the private loans you carry.

You have multiple options with federal loans with income-driven repayment plans and PSLF qualification. For private loans, use a resource such as credible.com to see if it’s worth your time to refinance your private loans

Almost every physician has to deal with the burden of student loans. Once you have your information together, you can figure out the best strategy for getting the debt paid down.

10. Schedule Periodic Checkups for Accounts

Now that you have your plans in place and you’re striving to maintain organization with your finances, you will have to force yourself to follow up. Go ahead and set reminders to yourself in your calendar or your smartphone for the specific dates which something needs your attention.

For instance, if you know a bill needs to be re-negotiated each year, then put in the calendar for a year from now. Do this with everything you feel is worth a phone call. 

Schedule check-ins with yourself to make sure you’re hitting your financial targets (such as establishing a budget, emergency fund, paying down debt, etc.) Hold yourself accountable to the goals you set for yourself. 

If you’re married, don’t forget to schedule money check-ups with your spouse. I know, it doesn’t sound very romantic. But communication is key for both of you to achieve an organized financial life. 

An Organized Financial Life Saves You Time and Money

My hope is now you see there are very easy, simple tasks you can start doing today to get your financial life organized. Think about the amount of time we waste when we don’t know where things are. Then think about how much money we waste each year when we pay our bills too late and rack up late fees.

Yes, it does seem like there are lots of things to do when it comes to finances. Unfortunately, there’s really not a way to make all the tasks go away. What we can do, however, is go step-by-step to finally achieve an organized financial life.

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