Three Ways Organization Helps Your Budget


There are plenty of advantages to becoming more organized. Your closet won’t be such a mess. Your home will look neater. You can invite guests over without worrying about your kitchen and bathroom being in disarray.

In addition to all of those quality of life measures, did you know that being organized can help you save money as well?

Here are a few ways becoming more organized with your finances can actually result in greater savings.

1. Fewer Impulse Purchases

Many people go to the store with good intentions. They believe they’re only going to purchase one or two items. If they’re going grocery shopping, they believe they’re only going to buy the essentials.

However, once they’re in the store they begin acting impulsively. They don’t know exactly what they need, so they buy a bunch of clothing or a bunch of ingredients and hope for the best.

When they get home, they find the clothing they bought isn’t what they needed. Maybe it doesn’t go with their current wardrobe. Maybe they have too many of the same pieces of clothing for a particular season or occasion, and not enough for another.

If they’re buying groceries they may find the ingredients they purchased don’t combine well enough to make a meal. They end up wasting food or having loads of excess food within their pantry or cupboard.

This is why shopping with a list can help.

Not only will you save money by not making impulse purchases, you also won’t waste as much money picking up things you don’t need.

The only way to develop the habit of shopping with a list is by becoming more organized with how you manage your money.

2. No More Late Fees

How many times have you paid late fees or late charges on a bill?

Not because you didn’t have the money to pay the bill, but because you forgot to make the payment on time? As a result, you probably ended up paying extra either in late fees, interest charges, or both.

Becoming more organized with your finances can help you avoid this situation.

First and foremost, automate your bill paying whenever possible. Set up a monthly or weekly draft directly from your account that covers your bills in full. Just leave an additional buffer of money within your bill paying account to prevent overdraft fees or overage charges.

Develop a system for any bills you can’t pay automatically. Schedule a consistent time each day or each week when you sit down, review your accounts, and pay all of your bills. Designate one place within your home to keep all of these documents.

The more organized and systematic you are, the more you’ll be able to avoid paying unnecessary charges.

3.   Managing Your Investments

The difference between earning even one additional percentage point on your investments can result in thousands (if not tens of thousands) of additional dollars over the span of a decade or two.

Paying attention to your investments is one of the most crucial things you can do to enhance your financial life.

You don’t need to become an investing genius, either.

Have a simple asset allocation that’s aligned with your age and risk tolerance, and rebalance your portfolio periodically. These two things will give you a solid financial footing.

The best way to manage this, again, is simple organization. Set aside a particular time every month or every quarter to review your investments. Make sure your asset allocations aren’t out of whack. If they are, consider rebalancing to bring your risk exposure back to its proper orientation.

Organization is one of the most overlooked and underappreciated ways to take charge of your money and take back control of your finances.

Start automating your bill paying, investing, and budgeting processes. Develop systems for anything you can’t automate. After a month or two, you’ll find your financial life is more effective and less stressful than ever.