Rich by Thirty. Lesley-Anne Scorgie
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the highway with a broken-down car and no cell phone service to enable her to call for help.
Erica needs to get organized! If you read the last paragraph with a sinking feeling in the pit of your stomach, don’t worry. It’s never too late to start!
File Folders Are Your Friends
If you don’t track your money, you’re going to lose it. So the first step in your organization process should be to set up a file-folder system, whether electronically or using good old-fashioned paper file folders. If you’re like me, and some of your important documents are still sent to you by snail mail, you may need a tracking system that is a combination of both electronic and paper. If you go the paper route, head to your local office supply store and purchase multicoloured folders, labels, and an accordion case or one of those desktop hanging-folder contraptions.
Files are important because they allow you to separate and manage all the paperwork pertaining to the different areas that affect your financial, personal, and career life. Filing also gives you an opportunity to review your financial and personal information more carefully.
Here are some examples of file names that might be relevant for you:
Bank statements (if you have more than one account, make a file for each and include the account number or type of account on the tab for easy reference)
Utility bills, such as electricity, gas, and water (again, one folder for each utility)
Cell phone bills
Receipts
Credit card bills and related materials
Pay statements
Tax/government-related materials
Investment statements
Resumés and letters of reference
Health information
Certificates of achievement
School information
School expenses
Employment information
This should be enough to get you started. As you work your way through the stacks of important papers in your dresser drawers or on your desk, you’ll probably find other materials that should be given a file. But don’t get too carried away! You don’t need a file for every piece of paper that makes its way into your home. A rule of thumb: file only the things that are important to you and that could significantly affect your life.
When you organize your files, put them into an order that makes sense to you — alphabetical, most frequently used, whatever. Just choose a system that will allow you to remember where things go.
The Not-So-Dreaded Spreadsheet
Although some people run screaming at the thought, a truly great way to get organized with your finances is to set up budgets using a computerized spreadsheet program (chapter 4 has more information on budgeting). Most software packages come with a basic spreadsheet program, and that’s all you really need. It allows you to insert formulas to add and subtract numbers automatically, or dates to assist you in planning for certain purchases.
You can also use your computer to create a list of “big-ticket items” that you can work toward purchasing as time progresses. For example, you could list items like a bicycle ($350) or car repairs ($900) or a down payment on a house ($10,000). Similar to what I suggested in chapter 1, put your list someplace where you’ll see it on a daily basis (I have mine taped to my desk at home). It will help motivate you and keep you focused on your goals.
Let Technology Work for You
Getting organized with your banking and investments is easy when you have online access to your accounts. All you have to do is log on for a few minutes to check your investments, your bank balances, pay your bills, whatever! Make sure you register for your bank’s online services (you may need to see a customer service representative to do this). If you’ve started to invest, you can use the Internet to track the performance of almost any stock, bond, mutual fund, or index or exchange-traded fund. Some good sites are:
www.bloomberg.com
www.finance.yahoo.com
www.globeinvestor.com
www.morningstar.com
Most North American financial services companies, such as banks, have a website containing all the relevant financial information for your banking and investments.
These websites, and others like them, include graphs showing the historical performance of your investments. They also include information to help you determine if a particular investment would be good for you. Some websites even allow you to download data for creating your own graphs in spreadsheet programs.
Twenty Minutes a Week
Getting a handle on your money doesn’t take much more than a little planning and checking up once a week. If you’re willing to take 20 minutes out of your busy week to devote to your financial future, I can guarantee you success. How many hours a day do you spend on social media, surfing YouTube, watching Netflix or television? If you are like most North Americans in our age group, you are glued to your electronics for 6 to 10 hours a day! That’s between 42 and 70 hours per week![5] If you cut back 20 minutes per week of Instagram or Facebook and spend that time checking in on your money and learning more about how to make it, grow it, and spend it wisely, you can become a self-made millionaire.
With the 20 minutes you manage to free up, you could:
Review your banking transactions. This will help you keep track of your expenses and income to ensure that you aren’t overspending.
Brush up your investment skills. Read a book about money management or surf financial websites or the business section of your local paper.
Keep tabs on how your investments are doing.
Set up your automatic banking transactions for the coming week.
The Big Bad Bank
Nineteen-year-old Kumar is in his second year of college. He hides half of his savings in the box his Apple LED Cinema monitor came in two years ago. The other half can be found in a small box in his closet. At any given time, he has a stash of more than $9,000 cash hidden in his room. Because he can easily access his money, he considers this technique more financially convenient than a bank.
Despite often getting a bad rap, banks are not evil. In fact, a good relationship with a bank you’re comfortable with is a key component in your getting-organized campaign — as important as that filing system I recommended earlier.
As convenient as it may seem to have money sitting under your hard drive, it isn’t very safe. There are way too many risks associated with keeping your money “under your mattress” rather than in a bank account. What if your house was robbed? What if your roof leaked? You could lose everything! Besides, if your money is sitting in your closet, it isn’t earning interest, is it? And if you read chapter 1 carefully, you now know how important compounded interest and reinvested returns can be. The best place for your money is in an account where you can monitor its activity and earn interest.
Setting Up an Account
If you haven’t already set up a bank account for yourself, now is the time. The first step is to pick a bank or institution that you would like to deal with.
There are large banks like RBC Royal Bank (Canada) or Bank of America (U.S.), or local banks like Vancity Bank in Vancouver or Columbia State Bank in Seattle. Most of the larger banks are owned by shareholders, whereas some of the smaller banks — typically credit unions — are privately owned or owned by the collective group of their customers. And Internet banks, like Tangerine (formerly known as ING Direct and now Capital One 360 in the U.S.), are becoming more popular because they have lower fees due to low overhead as they generally don’t have a network of brick-and-mortar