A simplified filing system

Has your "to-file" box exploded? Mine used to be an endless pit of bills, receipts and important tax documents. Whenever it would be time to re-finance or file my taxes, I'd spend hours going through my box, swearing I'd eventually get around to filing everything. It's difficult to know which bills to keep and which ones to toss. The internet is making it easier than ever to track everything online. However, requesting a statement older than 18 months can be time consuming and expensive. I tend to hang on to all of my bills just in case. My filing cabinet got rather full and soon, my system was out of control. Then I discovered this easy way to keep track of everything.

12 month filing system

Supplies

A filing cabinet or box

Hanging Pendaflex folders with labels

1. 12 of the same color
2. 2 red
3. 1 of the same color for each automobile you own
4. 1 color folder for every member of the household
5. 1 of the same color for each pet requiring vet visits and other services
6. 1 additional folder for Legal Documents

• Your first file will be one of the red ones. Label this "Bills to pay". Whenever you get a bill that you don't have time to pay, slide it into this folder. When it's time to pay bills, go to this file, pay the bills, mark them as paid and file them in the month they are due. It will be obvious when a bill is unpaid. Don't worry about setting up a system to indicate the due date. If a bill is in the folder, pay it. Bill payer is great for this. I especially love bill payers, such as BofA California, which will allow you to post date your bills.

• Next, label the 12 folders by month. Start with the month you're currently in. Move this month to the back when the month is over.

• Next, label your second red folder "taxes". In this folder, store everything you'll need for your taxes. This might include donations, mileage, unreimbursed business expenses, tax/ investment statements, etc.

• Label the automobile folder(s) by the types of cars you own. Keep all maintenance records in this file. It will prove to be very valuable when it's time to sell your car.

• Finally, each family member gets a file. Important documents go in these folders. This might also be a good place to store vaccination records for your children but be sure to place a copy in their school station notebooks that you learned about yesterday.

• It might also be a good idea to have a file for insurance policies and other important legal documents. While I chose to file these in my safe deposit box, having a copy on hand is never a bad idea.

When the New Year comes, take your monthly files and combine all of the contents into a manila envelope labeled for the past year. When it's time to file your taxes, all of your documents are ready to go in one easy place. Keep your auto, pet and personal files the same but flip through them to see if there's anything you need to get rid of. I've also used folders for "upcoming events" for things like wedding invitations, vacation planning, etc. Some might choose to include this in the Mom's notebook for the school station we learned about yesterday.