Sunday, May 6, 2007

Getting Organized

The first step in any good budget or debt elimination plan is to get organized. If you are anything like me, you have become so overwhelmed with it all that you may have lost control. You may have no idea how much you owe and to whom. As everyone knows, if you cannot afford to pay a bill when it comes in, the next best thing to do is to toss it into a drawer or a box and ignore it.

My challenge to you today is to get organized.
For this challenge, you will need one of those portable file boxes and some 8-1/2" by 11" file folders (the more colorful, the better).

Step 1: First, go through all of those closets and drawers and boxes and pull out each and every unopened envelope and neglected bill and gather them all in one place. Once you have done this, I want you to go through and open them all, each and every one of them, and separate them into stacks by creditor.

Step 2: Next, organize what you have left. Go through each stack one at a time. Open up any unopened statements and start throwing away as much of this stuff as you possibly can, including unneeded envelopes and multiple copies of statements. Keep only what you really need, such as very important correspondence and the most recent invoice or statement relating to that particular debt.

Step 3: Finally, organize the statements and other papers in chronological order. Using one file folder for each different creditor, file the papers flat in the folder. You will then have one neatly-organized folder for each debt. Organize the folders in the portable file box. Keep out only the most recent statement for each debt and either paperclip this stack together or put it in a file folder of its own.

Avoiding debt is in many ways an emotional and psychological issue. When we feel overwhelmed by a situation, the effect can be to become so paralyzed that we take no action at all. By getting rid of the multiple copies of statements and collection notices and payment reminders, and keeping only what we need, we are left with a manageable stack of bills. We can then begin to deal with our debt situation one step at a time.

As we begin to address the issues of budgeting and debt in our lives, we may find ourselves needing to go through these same challenges periodically. Maintaining a good budget or a debt free lifestyle, like dieting, requires a lifetime commitment to change. It is far too easy to fall back into bad habits and to lose track. So, it is helpful to all of us to go back to basics every now and again and to reassess our financial situations.

I strongly suggest that you do something immediately toward taking this first step, even if it is only to go and pull your shoebox full of bills out of its hiding place under your bed. Any first step that you take right now, right this minute, will improve your chances of following through.

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