If your money management system has you drowning in piles of receipts, bills, and financial statements, you’re not alone.
“We get the same amount of paperwork in a week that our grandparents got in a year,” says Christy Best, a personal organizer and founder of the Clutterbug Internet Network, who teamed up with Visa USA to create a personal finance system that depends primarily on organization and consistency to keep consumers’ finances in order.
The system, called M.O.N.E.Y., consists of five steps that consumers should spend five minutes tackling every day.
“The M is for moving the paper,” says Best. “At the end of the day or in the morning, file what you need and trash what you don’t.” Rather than wait for bills to pile up, open the mail the day it comes, and shred or discard junk mail immediately.
The O has to do with online bill payment, which is going to “eliminate all this paper from coming across your desk” in the first place, Best says.
If you’re concerned about the security of online bill payment, Visa USA Director Rosetta Jones points out that the number of incidences of payment-card fraud is “half of what it was 10 years ago. We know paying with plastic offers convenience and security.”
The N takes into account those new ATM and purchase receipts. Rather than waiting until they pile up, enter those transactions into your budget immediately.
Once those new charges have been entered, “put them in a pretty bowl or nice box on your desk and then cross-check those against your monthly statements at the end of the month,” Best adds. “When that’s been done, just run them through your desktop shredder unless they’re for tax purposes.”
The E stands for evaluation, and you want to evaluate your expenses each month. “We would all like to stick within a budget,” Best says. And you might be surprised at what you’re spending your money on. Best admits she was shocked by how much she spent on lattes.
And the Y signifies your bottom line. “The bottom line is it’s your budget,” says Best. “It’s customized to you, you want to create a monthly budget and stick to it.”
The hardest part of the process is likely to be the daily aspect of it, Best says. If you miss a day, you need to make up those minutes in order for the system to work. While it might take time to get used to, “it’s kind of like going on a diet,” Best says. “Just like you lose a little bit of weight at a time, you lose a little bit of paper at a time.”