Monday, January 11, 2010

Filing and Organizing Financial Paperwork

Since it is January - a great month for organization - I thought I would write a little bit about the various systems I use, (and have used in the past,) for organizing all that financial... stuff. I'm not saying that what I do is the best, by any means. "Different strokes for different folks," and what works for me may not work for anyone else. However, someone might see an idea here that will spark an idea of their own. So, here you go:

I pay all of my bills through my online banking system. I usually do it during a few minutes of my lunch hour, so, when bills come in the house, they get opened, glanced at, then put in my work bag. This happens in pretty much one movement, no letting them pile up on a counter, they go straight into the bag! Then, the next day I will pop on my computer at lunch time and go to my bank's web site. Many of my bills I have auto-paid. I set them up in January and then they just pay out automatically each month. This works great for bills that are the same amount and due at the same time each month; when I had car loans and credit card debt they were all set up this way. Now it is mostly my mortgage and my utility bills that are on a "budget plan" (so they are the same each month,) that are on auto-pay. I still like to sign into my bank's site though and make sure everything is going out the way it should. It's just habit. However, the beauty of this is that even if I am on vacation or a statement is lost in the mail, the bills get paid on time. It is one of the reasons my credit score is good - because I haven't had a late bill in years.

Some of my other bills are more random, either in when they arrive or the amount due. Trash, water, insurance - they are all quarterly or semiannually. My cell phone comes at the same time, never seems to be quite the same amount each month. I don't have an automatic bill pay for these, instead I create a single payment each time a statement comes in.

After I verify a bill has been paid, then I file the statement in my work bag. I have a folder in it that contains all the statements from the prior month. This is when I glance and make sure that everything seems normal. When I saw my cell phone took too big of a jump up over the course of a month, I spotted it right away, because I have the prior month's statement at my fingertips. So, the new month goes in the Statements folder and the old one goes in a To Be Filed folder.

So that is the basic set up for simple bills and things, here's what I do with the old statements...

Talk about low-tech, I have two cardboard boxes for filing. One is marked with the present year, (I just made my 2010 one a few days ago,) and one is labeled Taxes. I use envelope boxes I get from work - they are sort of like shoe boxes, but wider and and flatter. Any receipt, statement or other piece of paper that has to do with my tax return goes in the Taxes box. Everything else gets thrown in the year box.

I have gone through a couple of different systems for filing statements and receipts. I actually originally started with the shoe box system when I read about it in a magazine years and years ago. Then I got more sophisticated and started keeping files in a locked file cabinet. This worked fairly well, except that while I had no problem adding something new to a file, I wasn't very good at taking things out. Soon my Auto, Credit Card, Insurance and other folders were filled to the brim. For some reason (laziness, perhaps) sorting out the cabinet and removing the previous year's statements just didn't really happen.

Then I became pretty eco-conscious and decided to try to go paper free. I kept one month of statements as I do now, but older statements and receipts were all shredded and recycled. I felt good about the planet, but lousy about my pocketbook when not having a receipt cost me a couple hundred bucks. That's when I went back to my shoe box filing system.

Checking my bank account online on a regular basis means I see instantly if there is any strange charges or odd activity in the account, keeping a paper trail of receipts and statements helps with taxes and returns. It takes up very little space and is super easy to use.

Not all my financial documents are in envelope and shoe boxes, however. Important documents are kept in a fireproof safe in my basement. Documents I update regularly like my budget, are kept in my computer in spreadsheet format. Now in my file cabinet I keep more "timeless" information - taxes, important paperwork on my home and other purchases, generic account information, things like that. It is no longer stuffed to the gills with 3 years of statements from every bill I have ever gotten!

What do you do with all your financial paperwork?



Photo by: SpecialKRB
via flickr


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Thursday, January 7, 2010

It's Not All Bad...

Wednesday I posted about my big financial fear when it comes getting a new tenant. However, I have to admit that if ever there was a time for me to have this problem, it is now. The first quarter of the year is actually looking really good for me for extra income. Here's the scoop:

January

I got a raise!! Ha! I am so excited. I just found out about it today. It isn't some huge, massive raise, but in this economy (and don't forget, I am in Michigan - where we have one of the worst economies in the country) I am absolutely thrilled to get one at all. In truth, it was far more than I expected. I'll tell ya', this is the reason I continue to work where I do, they have always taken really good care of me, on so many levels.

Profit sharing!! At the beginning of December I wrote about getting a rather handsome profit sharing bonus. Our year end profit sharing is split up into two payments. They pay an estimated portion before Christmas and the final amount after the December books are closed. That means that sometime this month I should receive Part 2. The second half is usually a bit smaller than the first, as they try to give us a slightly larger portion before the holidays, (See? My company is just so thoughtful.) but I am still really excited about it.

Part Time Work - I have scheduled a couple of shifts at my part time job. I was only able to pick up two for January based on availability... I didn't have it, and my coworkers did. That is just fine though, I worked a ton of extra shifts last month when they couldn't so I'm happy to take the backseat this month.

Freelance Work - Okay, this is just plain nifty. You may remember that back in October I picked up some freelance work. This was a new thing for me. Someone I knew needed a project completed and a dear friend recommended me for it! Well, I just picked up another one. This work pays by the job. Admittedly, if you calculate the hourly pay, well, it isn't all that much. However, it's work I can do mostly from home, on my own schedule. I'll have to do some meetings and driving around, but it fits into what I already have planned and best of all, this is still a new thing for me so I am really excited about doing it. It is creative work with neat people and I am just tickled to be asked to do it. I'll be working on it this month and next. The final project is due at the end of February. My guess is that it will pay the first part of March.

Which brings us to next month....

February

More Part Time Work! I have another part time job that hires me for just three weeks out of the year, and one of those weeks is near Valentine's Day. That's always a hard week, I'm working practically two full time jobs at that point, but it is only a few days. In fact, it isn't even a full week, it is just Monday, Tuesday, Wednesday, Friday and Saturday. For a few extra hundred dollars, I can work extra hours for five days!

Plus, the part time job I mentioned above will be having some more work starting at the end of February into March, which means I could pick up a few extra hours here and there.

March

Not only is there a lot of part time work that could be available this month, it is also:

Tax Time - Normally I try very hard for a even balance of taxes. I don't want a refund and I certainly don't want to pay them. In fact, I adjusted my payroll taxes to decrease the amount of taxes withheld and try to even out my tax burden. However, I am able to claim 25% of that very expensive house painting project I did this summer as a business expense, along with other expenses I invested into the property. I just got my packet from the accountant yesterday, if I get all my tax forms from banks and employers by the end of January and submit it right away, I usually see payment by March.

Other Factors

Had my tenant had to move out and to another state back when I first started this blog, I would have been completely terrified about it. The fact is though, over the last couple of years I have really gotten a lot of my financial ducks in a row. Not only do I get spare income as mentioned above, but more importantly I've found significant areas where I can save or reduce spending. I've created a living, breathing budget I can work with, and I have increased my monthly income in other ways that pay every month (like changing tax withholding on paychecks.) I no longer have any consumer debt, so I have greatly reduced my bills. I've also created an emergency fund and other funds to help pay for these kinds of issues. All these things add to a much more stable situation.

So, while I'm still nervous about not having a steady source of income for a month or two, its not nearly as bad as could have been.

Photo by: Rail Life
via flickr


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Wednesday, January 6, 2010

Being a Landloard and Getting a New Tenant

Well, last month was pretty crazy. Sorry about the lack of posts. A dear friend of mine just gave me a friendly poke in the ribs to get off my butt and start writing, so here we are! Rather than writing some big long apology post about what the heck has been going on with me, I think I will just pick up where I left off and fill you in as we go along. So that said... here we go:

My tenant is moving out at the end of the month and I am a wee bit panicked about it. She just gave her notice a couple of days ago and is apparently moving out of state at the end of the month. The rent for the apartment is $550 a month... and that is not at all included in the $900 I have as a goal for each month, so naturally, I feel a touch nervous about it.

However, it isn't all bad. There are some things I would like to do to that apartment and this may be my chance. Let's look at the Pros and Cons...

Pros:

Heat - One of the issues my tenant had was with the heat. The heat for the unit is controlled in my section of the house, which only makes sense - I pay for the gas. My ex-husband rented the apartment to my current tenant and at the time told her it would "be comfortable." However, my idea of comfort and other people's ideas can be two different things. Plus, the apartment has only a few heater vents and several old drafty windows. So, she was cold. My solution at the time was to buy her a supplemental electric heater and window film insulating kits. However, this would be a prime opportunity for me to install some nice baseboard electric heaters. Then my new tenant will have the majority of the heat they need supplied by me and can then add more as they need it.

Refrigerator - One of the other requests my current tenant had was for a new refrigerator. I was actually planning on purchasing one for her this year. The one that is in the apartment unit now works, but admittedly, it is a bit dated. I've repaired it once and it cost me over $90 to do it, since the parts are obsolete. It would make sense to buy a nice EnergyStar energy efficient refrigerator. Not only would I be able to claim it on my 2010 taxes but it would be a relief to have it done before the other one clunks out. The only problem had been arranging delivery and replacement with the tenant, since she is rarely home (and I wasn't too keen on taking her items out of the old fridge and putting them in the new one.) If she is out of the unit, I can do it anytime I want.

Possible Income Opportunity - My home has a three stall garage. I like having all the stalls to myself, but I realize that it is just convenience. It would be fairly easy for me to move everything out of the adjoining stall to my own and offer a garage stall with an electric opener for an extra $25. Or then again, I could offer them the single locked stall - it doesn't have an opener, but it would let them lock up some additional storage items. ...actually, the more I think about it, I like that option better. Hmmmm.... either way, it would be a possibility.

Paint - My ex-husband has several rental properties and one of the things we used to talk about was "Better rental = Better tenants." When we worked on properties we always tried to improve the look of the apartments between tenants. This unit is actually really sharp and in good condition, except for the stairwell. It desperately could use some fresh paint and some molding repaired. This would give me the chance to do it.

Cons:

Money - All of the above repairs cost money. Yes, they are items I can claim on my taxes, however, I won't be seeing that money back until next year. I have money set aside that I was going to use for some of these home repair projects, but now I am wondering if I shouldn't keep as much liquid as possible just in case it takes awhile to find a new tenant. The question then is, will the repairs draw new (better) tenants or does it make sense to woo them with promises of all the things I will do... once they sign the lease.

Lack of Income - While I do have a cushion of funds set aside for just this case and can go fairly easily for a few months without a tenant, but I don't want to go too long. The longer I go the more I deplete my reserves.

Finding a Tenant - One of the things that just stinks about being a landlord getting new tenants. Showing the apartment, getting applications, doing credit checks and all that is a fair amount of work, and extra time isn't something I have a lot of right now. It isn't something I can afford to put off though, either. It is going to have to be a big priority.

To Dos:

Here's some of the things I can get working on right away:

Put Together a Lease - As I mentioned, my ex-husband was really the landlord and he had a contract he used that he got through his membership in the local Rental Property Association. I have a copy of it, but not a clean one I could give to someone. I also have a copy of the lease I signed when I lived in my last apartment. It was owed by someone like me and they had had a lawyer draw it up. It had some great language in it, so I have saved it. One thing I need to get done ASAP is putting together a lease and having it looked over so it is ready to go.

Check Up on Credit Checks - My ex also used his connections with his Property Association to do this. I don't have a membership there, so I need to decide what company I am going to use and look into costs. He charged a $25 nonrefundable credit check fee, which paid for the checks, but gave the new tenant $25 off their first month's rent. I have to decide what I want to do about this.

Get Photos of the Apartment - Though I would almost rather photograph it empty, the current tenant has it decorated very cute, and I just don't want to wait until she moves out to get on this. I can always take some now and replace them later, if necessary. They will be used for...

Advertising the Apartment - Time to do a little research. I already have mentioned it to a few friends and put a little note on Facebook, just to get the ball rolling. There is a website for apartment rentals in town, I will want to see how much it costs to use them. I will also be looking at Craig's List. In the past my ex just put a sign in the yard, but I think I want to be more proactive than that. I will be out of town next week so I probably won't start it until the week of the 18th.

Review the Apartment - It's been a few months since I was last in the apartment. I'll need to get in soon and get a feel for what types of work, other than cleaning, I have to plan on doing. Having a plan is always a good thing.

So that's what I have on my plate for the next couple of weeks, how about you?


Photo by: Laurie.McGregor
via Flickr


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