12 Key Benefits of Financial Organization
by Andrea Norris-McKnight
Are you financially unorganized? If you ever get hit with late or overdraft fees, don’t know how many charges went on your credit card last month or can’t remember the last time you checked your insurance policies, it could be due to a lack of organization. And it could be costing you a lot of money.
Here are 12 key benefits of financial organization (and good reasons to get your financial house in order!).
Key Benefits of Financial Organization
1. Reduced Fees
Staying on top of your many loans’ and bills’ due dates helps ensure on-time payments and avoid late fees. This is especially important for loans and bills that can negatively impact your credit score when paid late.
2. Greater Savings Opportunities
In addition to knowing when bills are due, you should track the expiration dates of deals and discounts that can save you money. Missing sales, forgetting to use coupons or discount codes and failing to submit rebates on time can cause you to lose significant savings. Even some gift cards or cash-back rewards can be time-sensitive and lose value if you forget to use them on time.
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3. Easier Budgeting
Do you hate how tedious budgeting can be? You can use many apps to automate and streamline the budgeting process for you. The less time you spend tracking your budget, the more time you’ll have to evaluate it to determine ways to spend less and save more.
4. A Better Awareness of Unused Services or Billing Mistakes
An organized overview of your monthly expenses can highlight unused subscriptions or services you can cancel, saving money. It also can make it easier to spot overcharges or improperly credited payments. Or maybe an electricity or water bill has jumped up, indicating a mistake in the reading of your meter or a problem, such as a leak, that needs repair.
Such oversights and mistakes can become costly if they go unnoticed for several billing cycles.
5. Smarter Shopping Habits
You might not consider a shopping list part of your finances, but it is an effective money-saving tool. With an organized shopping list and an understanding of your needs, you can better comparison shop, avoid buying things you already have on hand and reduce impulse purchases.
6. Interest Savings
Planning your expenses and how you’ll pay for them is more manageable when you have an organized budget. When you continually deal with unplanned expenditures, you are more likely to use a credit card to cover them and possibly incur interest charges on balances you can’t afford to pay in full.
Do you have any interest-free loans that must be paid in full by a particular date to avoid that interest? Or perhaps a credit card balance transfer offer you’ve taken advantage of? Staying on top of these dates can help save you considerably on interest.
Use these guidelines to choose the best plan to pay off your credit card balances.
7. Tax Savings
Keeping organized financial records makes it easier to claim deductions and credits you’re eligible for when you file your taxes. This is especially important if you freelance or have a side gig for which you must do your own record-keeping.
8. Savings on Insurance
Being financially organized can translate into savings on insurance premiums, as insurers may offer discounts for things like bundled policies, timely payments and more. You’re also more likely to remember to evaluate your insurance needs regularly, make necessary changes to coverage and deductibles, ensure you’re receiving discounts for which you’re eligible and comparison shop for cheaper coverage.
9. Better Credit Management
Organizing and regularly checking your credit reports can help you work towards improving your credit score. You’ll also notice costly credit report errors and spot signs of possible fraud sooner.
The better your credit score, the better loan interest rates and financial opportunities.
10. Optimized Investments
An organized investment approach allows a timely review of portfolios to reveal any non-performing assets or investments that no longer support your financial goals. Better organization can mean more informed decisions about selling or reallocating resources.
11. More Time for Earning and Saving
As they say, time is money. Being organized means less time searching for financial documents, figuring out why your budget is so far out of balance or doing the many other things that take more time when you’re unorganized. Instead, you can use that time to generate additional income or savings.
12. Reduced Financial Stress
Financial clutter and disorganization can lead to late payments, a tighter budget, overspending — and increased stress levels. With organized finances, you have greater financial control, which can boost your self-esteem and overall well-being and reduce stress.
Get Better Control of Your Finances
Some of these benefits of financial organization have a direct monetary value. Others offer long-term economic advantages or safeguard against potential losses. They all can help bring peace of mind and better overall financial health.
If you don’t feel in control of your money, consider organizing your finances as a first step in getting control.
Reviewed January 2024
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