Household bills can be a big contributor to paper clutter. Everyone has bills and they can seem to arrive faster than you can figure out what to do with them.
It is easy to just throw them in a pile and think you will deal with them later.
Does later ever really come?
Before we start talking about organizing bills, let’s define “bills.”
On this page I will show you ways that you can organize all of those recurring payments that you make each and every month. Things like…
- Your electricity bill
- Your telephone bill
- Your auto loan payments
Don’t confuse your monthly bill for your auto insurance policy with the insurance policy itself. Your monthly bill falls into the category of bills, but the policy itself falls into the category of vital records which need to be organized in an entirely different way.
How Long to Keep Your Bills
With only a few exceptions, there is no need to keep your monthly bills any longer than one year.
If any of your recurring monthly bills will also be used to substantiate claims you will make on your tax returns, after you pay them they should be kept with your income tax records.
If you have a dispute about one of your monthly bills, make your notes about the resolution on your statement. Write down who you spoke with, on what dates and any information that was provided to resolve your dispute. Keep that statement for at least 2 years, in case the issue comes up again.
So now you might be asking, how do I organize my bills?
How to Organize Bills
How to organize your bills is somewhat of a personal decision. You have to create a system that works for you and your lifestyle. If your system is not easy enough to maintain, you won’t do it.
Here are two great methods that I have used. Both work equally well. Choose the one that best suits your needs, or use these ideas as a jumping off point to come up with your own system.
The Two Drawer Method
For this method you will need a two-drawer, plastic storage unit, small enough to fit on your desktop. Designate one drawer for unpaid bills and the other drawer for paid bills.
Whenever a bill comes in the mail, immediately place in the unpaid bill drawer. When you have paid the bill move it to the paid bill drawer.
At the end of every year, shred the contents of the paid bill drawer and start fresh for the new year.
This system works well because it allows you to see, at-a-glance, what bills you have outstanding. It also eliminates the possibility of years worth of unnecessary bill stubs piling up and creating clutter.
The Monthly Folder Method
For this method you will need 13 file folders and either a file box, stand-up file, or file drawer. Label 12 folders with a month of the year. Label the last folder “Unpaid Bills” and place the folders in your file box, stand-up or drawer.
When a bill comes in place it in your Unpaid Bills folder. As you bill each bill, place the stub in the folder for the current month.
The following year you will start off each month by shredding the existing contents of the current month’s folder. The main difference between this system and the Two Drawer System is that you only have to shred one month of the previous year’s bills at a time.
Choosing the System That is Right for You
Whether you use one of the systems I have described or create one of your own, the most important thing about a system to organize bills is that it works easily for you.
Don’t procrastinate about creating a system because you don’t have time to go back through the 5 years of old bills you have stashed away and start completely fresh. Start your system now. Put the old bills in a box and work on discarding them a little bit at a time.
Start getting your paper piles under control with a system to organize bills.