For the bigger items like our insurance and rent payment, I go ahead and set them to be paid automatically. All I have to do is enter the amount in my check register (or just import it into Quicken, which is what I’ve been doing). It’s so easy to set bills to go out for a specific time. I don’t have to remember to write a check and mail it, leaving enough time for the payment to go through the mail. And many of the payments are sent electronically, so I don’t have to worry about lost mail either.

For other bills that aren’t a regular amount – electric, phone, cell phone, cable – I just have them set up as payees. That way, I only have to enter the payment amount and due date each month. As soon as I get the bill, I schedule the payment. Otherwise, I’d put the bill aside and forget to set up the payment.

It has saved us a lot of postage and late fees.

Fortunately, with a minimum number of transactions there’s no monthly fee for using automatic bill pay. It really has been a huge help to me, especially since I prefer to have my bank send out payments, rather than letting companies debit my bank account.

Do you use online banking? Do you monitor your checking balance online? Why or why not?

Easy, right? It should be if you have your paperwork organized.

It just so happens that the bill was in my “to be filed” pile and I was easily able to put my hands on it. And right on the bill was the notation of when and how I’d paid it. I also found the credit card bill that showed the charge.

With a short phone call, things should be resolved. I’ll check back in a week to make sure that their records have been corrected.

If I didn’t have a designated place for holding files until I can file them, I would have been searching for a long time to find what I needed. And fortunately, I remembered that particular transaction, which made it easier for me to put my hands on the papers.

The question is, do you have a spot for papers before you file them? Do you have a filing system that makes it easy for you to find what you need when the occasion arises?

I used to file all of my bills by type: electric, phone, car, water, etc. But when it was time to file, it took a while. I had to look at each bill, decide what category it went under, find the right file, and drop it in. It seemed too time-consuming.

This method works for a lot of people. That’s great! Your system is only good if it works for you and you use it. But it didn’t work for me. So I had to find something else.

I started filing things by the month. Everything from January? One folder. February? Next folder. It was much easier for me to find the date and just drop it in the file. I still use this method, partially.

If there’s an odd item, say a medical bill that I’m dealing with and will need to find later, I go ahead and file under medical. Same with insurance. Things that I will need to hold more than a month or two, or that won’t get filed away with my taxes. Things that I won’t remember by the month, but only by their type or the vendor.

Any tax-deductible items, though, go in an accordion file, grouped generally by how I’ll enter them into my financial software during taxes.

My system is a hodgepodge of different techniques. It works for me, most of the time. Realize that cobbling together things is okay if it makes your life easier. If it complicates matters, then experiment and try to see what else will work.

I’ll be doing that with my filing at some point, because I’m not quite happy with it. Filing by month is quicker and easier, but I’m not sure it’s helping my retrieval ability.

How about you – are you happy with your filing system? What works? What doesn’t? What would you like to change?