Why? You may ask. I already have trouble keeping my room or office tidy.  I get it. But trust me, it pays off. You will thank me later. Getting your financial house in order has a number of immediate advantages, nicely organized below.

1. A catalogue of your most valued possessions. You may find you own more than you thought, or highlight things may be you don’t need to own. This may help you “declutter,” an investment wisdom that helps you align financial possessions to life goals. 
2. Increased awareness.  What’s the best way to improve your golf swing, or your freestyle stroke if you are a swimmer? Take a video. Seeing is believing. Getting organized lets you see at least two things:
   • Your net worth. This is the sum of everything you own, like your house, your IRA investments, etc. minus what your owe, like your mortgage and other loans. Your net worth can tell you how close you are to achieving your financial goals, like . It’s one of the measures you can use to monitor and celebrate your progress, or to make adjustments if you have a setback.
   • Your statement of cash flows. This is the sum of all your income sources, including wages, rental property income, etc. minus all your expenses. The greater this number the more cash flow you generate that can be used for your long term goals.  
3. More savings. You never realize how much you can cut spending until you start looking at your spending patterns. If you need to save more towards your goals, dig deeper into your spending patterns. We can all find expenses we could have avoided. Wait, did I really buy that second mountain bike?
4. Helps you align your behavior about spending and investing to your goals, and give you the best chance to actually achieve them.  It’s simple. Your goals tell you where you want to be. Your financial dashboard tells you where you are. Your statement of cash flow tells you about the path you are taking to get to your goal.  There has to be alignment between these three, or chances are you won’t reach your goals. 

I realize that point two may be a contentious one. Many of us don’t want to see because we are afraid of what we may find. This should not discourage you. First of all, you may actually realize you are more on track than you think.  And if you find that’s not the case, what you see can help you find a solution to your problem. The sooner you act the better.

Key Steps

OK now, If you can’t wait to get started, here are four steps to get financially organized.

1. Start using a password manager.
2. Start using a password manager. Yes, this is so important, I thought I should say it twice. I too, thought I could just use one password for everything or write my passwords down in a secret little book. But that’s when all I was doing on line was checking yahoo mail or bidding on ebay. Now we run much of our lives online.  Real cyber security experts suggest the use of password managers like LastPass, Keeper, etc. Beside cyber security, the password manager generates strong passwords so you don’t risk running out of ideas, and it remembers them for you! Plus, you can use it across all your devices. I don’t remember having to reset a password since I started using a password manager, because my app always remembers them! 
3. Use technology like Mint, RightCapital, Personal Capital or others to link all your accounts. All these can create a net worth statement and will monitor your spending. You can do this in minutes if you have a password manager.
4. Start paying attention to your spending habits!

This process works best if it is integrated in a comprehensive financial or investment plan. 

So check our website to learn more about how our investing and planning approach can help you achieve your life goals, particularly if you aren’t convinced about financial organization yet!

Until next time.    

Massi De Santis is an Austin, TX fee-only financial planner.  DESMO Wealth Advisors, LLC provides objective financial planning and investment management to help clients organize, grow and protect their resources throughout their lives.  As a fee-only, fiduciary, and independent financial advisor, Massi De Santis is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice.