Streamline Your Finances in Eight Steps

by Liz Pulliam Weston, MSN Money Expert

Have you paid a late fee on a credit card or bounced a check in the past year? Did you misplace a bill, a statement or some other financial record? Do you ever wish you could spend less time worrying about money and bills?

If the answer to any of these questions is yes, it's time to take some steps to streamline your financial life. A few basic steps can save you time, money and headaches:

1. Use direct deposit. This would seem to be a no-brainer, but one in three workers doesn't take advantage of direct deposit. Instead, these workers stand in line at the bank or-even worse-use check-cashing outlets that chew up a chunk of their pay.
2. Get overdraft protection. Bounced checks are expensive and embarrassing. Protect yourself and your checking account by setting up overdraft protection at your bank or credit union. If you avoid even one bounced check each year, the account will probably pay for itself.
3. Put your bills on automatic. There are three basic ways to do this: direct payment, credit-card charges and online bill payment. Check with your bank and utility companies, as setup charges may apply.
4. Use personal finance software. Each year Microsoft Money gets easier to use, thanks to download features that whisk details of your financial transactions from your bank, brokerage and credit card accounts directly into your computer. Both give you a way to keep track of your finances and plan for the future.
5. Set up reminders. As mentioned above, your personal finance software can alert you when bills are due. Some credit cards, such as Discover, will send you an e-mail reminding you to pay. Online bill payment systems usually have a bill reminder feature, as well. Take advantage of these so you don't have to rely on your memory to make sure bills get paid.
6. Consolidate your credit cards. The more cards you have, the more due dates, interest rates, fees and terms you have to keep track of-and the more likely you are to make a mistake, pay a bill late and get hit with a fee. If you carry a balance from month to month, try consolidating all your debt onto one card-and don't charge more than you can pay off each month.
7. Consolidate your accounts. The more scattered your money is, the harder it can be to track. Having IRAs, mutual funds and brokerage accounts at several different financial institutions, for example, just creates more paperwork and headaches. Instead, move them all to one location and combine any accounts that you can.
8. Set up a filing system that works. You should have one place to put your bills as soon as they come into the house. If you get your bills electronically, they should be saved immediately to a specified e-mail folder. Paid bills and other financial documents should be filed away in logical order. Once a year, after you've filed your tax return, go through your filing system. Pack away the old documents you need to keep and toss the receipts and statements you no longer need.

Personal finance software can be a terrific tool for getting yourself organized.

Courtesy of NAPSnet.