by Peter Walsh
Mail
FYI ON MAIL
Coupons, bills, invitations, junk mail. Every day the mail is a project in and of itself. It has been estimated that the average American receives close to fifty thousand pieces of mail during his or her life, of which about a third is junk mail. Worse still, each of us spends an average of eight months in the course of a lifetime going through that junk mail! That’s why you should do any and everything you can to handle your mail more efficiently.
Household mail—it needs a home
We all receive important information through the mail—much of which requires some kind of response to ensure the smooth running of our homes and our lives. Bills need to be paid, invitations require a response, and inquiries from the bank or a government office need replies. Streamlining this process takes a lot of unnecessary worry out of responding on time and ensures that your household business is attended to in a timely fashion. You cannot hope to have a smooth-functioning household if you don’t have your mail under control.
In a small town in North Carolina, I worked with Matt, a guy who was so overwhelmed with mail that it was close to comical—even he dissolved into laughter when we started talking about it. Matt had decided that he had to keep all mail that came into his house. There wasn’t a lot of logic to this, but it was a belief that Matt had stuck to for quite a few years. However, while he felt that the junk mail could be stored in an ever-increasing number of large plastic trash cans in his home, he felt that the most important pieces of mail—paid bills, old credit card statements, any official correspondence—should be kept in a more secure location. He decided that the most secure place he could think of was his car. So Matt had a house overflowing with junk mail and a car bursting with personal mail. This all seemed like a fine idea until late one night when Matt swerved to avoid an animal on the road and, blinded by flying paper, wound up driving his car into a large pond just off Highway 70.
Take it from me—the backseat of your car is not the ideal place to keep your mail. Nor is the bathroom, family room, kitchen counter, or bedside table. Consider setting up a simple file tray or basket to hold all incoming mail that needs a response. This way you will easily be able to locate any mail that you have and can be sure that you are responding to everything that needs your attention. Get into the habit of always placing mail in this designated spot, and train everyone else in the household to do the same. It may sound trivial but it will save you hours of frustrated searching and ensure no more late payments or lost invitations.
Junk mail
Junk mail is your enemy! Imagine there is a knock at your door. You open the door to see a man with a can of spray paint in his hand. Do you: a) invite him in, or b) slam the door in his face? This is how you should think of junk mail! It’s an intruder waiting to get inside and wreak havoc. Junk mail is the bane of most people’s existence. But like it or not, it’s here to stay. It’s how we manage it that is important.
MORE FYI ON MAIL
More than 100 million trees are needed to produce the nearly 4.5 million tons of junk mail that’s mailed every year in this country, nearly half of which is never opened.
I am only half joking when I tell people that the moment you let a piece of junk mail touch any flat surface inside your home, you might as well pack up, move out, and sell the house!
Once inside your home, junk mail has the capacity to reproduce in the dark until it covers all flat surfaces. If you think this is crazy, please give me some other explanation for the fact that every flat surface in most of the houses I see (maybe yours?) is layered in junk mail?
Treat junk mail like the intruder it is. Wherever possible, do not let junk mail into your home. Place a recycle bin for the junk mail somewhere handy and be sure to deposit those annoying envelopes efficiently. Shred any correspondence containing personal information.
Another strategy is to stop the junk mail from ever reaching your home. This is a little more time-consuming, but well worth the effort. There are specific things you can do to reduce the volume of unwanted mail that you receive.
STRATEGIES FOR MINIMIZING JUNK MAIL
Contact the Direct Marketing Association by e-mail or regular mail. Visit their website at www.dmaconsumers.org and go to Consumer Assistance. Or send a postcard to the DMA, Mail Preference Service, P.O. Box 643, Carmel, New York 10512. Ask them to “activate the mail preference service.” You need to list your complete name, address, and zip code. Listing with the mail preference service will stop 75 percent of all national mailings. It may take a couple of months before you notice a difference in the volume of junk mail, but it is well worth doing.
Avoid receiving all those annoying credit card offers that swamp all of us. Call toll-free, twenty-four hours a day: 888-5OPT-OUT (888-567-8688) to have your name removed from the list of the major credit organizations. Follow the computer prompts and choose to have your name removed for two years or forever.
Insist that your name and address not be sold when you sign up for a new catalog, buy a new product, or any time you provide your personal details as part of a business transaction. Save a tree, control the clutter, and save a little sanity. Every little bit helps!
Bills and receipts
As much as we hate them, bills are the most important mail we receive. Personal correspondence is definitely more meaningful, but these days most of that happens via e-mail. If bills are not paid on time, credit card companies have no hesitation in slapping us with late fees. Credit card debt can sneak up on you, and it’s a nasty beast that eats your funds faster than you can earn them. If utility bills are left unpaid, you can find yourself without a phone or other basic services. Not being on top of your bills costs in ways beyond the financial. It causes stress and tension, both for you and others in your household. It can seriously impact your reputation, your credit rating, and, in the long run, jeopardize future opportunities for mortgages or car loans.
DEAR PETER:
“Get rid of the trash to make room for the treasures.” “Let the things that are important take center stage.” I walk around my house cleaning and saying these things to myself. I realize what is truly important to me and what is easily tossed. An indoor grill that I had not used in over four years saw its way to the garbage and I made room for the antique mixer my great aunt had given to me before she died, which I adore. The cheap mirror I picked up on vacation four years ago left the house in a pile of rubble to make room for a new-and-improved message board with an actual place for hubby to put the incoming mail and a place for me to hang my keys! Then, instead of a denim bag on the back of the door for the bills, I purchased a real bill organizer with dated slots. And it works! Yesterday I paid the cable bill the same day we got it!
Use technology to your advantage
Try to pay as many bills online as you can. Consider software like Quicken to track all bills, assist in online payments, and help in the yearly preparation of your taxes. Most companies will accept an automatic bill-paying schedule, or you can simply set up your online account and then check the bills to ensure their accuracy each month before approving the money transfer.
Streamline the process
Keep all of your mail in one central location. It should be close to or on the same desk as your computer. When it comes time to pay your bills, you should be able to do so quickly and efficiently—whether online or by mail. In addition, keep all necessary bill-paying items—stamps, envelopes, and checkbook—together in the same place near the mail and computer. No more time wasted trying to find envelopes, stamps, or your checkbook. The bills are painful enough, why take any longer than you absolutely have to?
Maintain a system
Many people are uncomfortable with shredding or discarding paid bills. I have seen homes where every receipt and paid bill from the previous ten years is strewn throughout the house. If you want to keep paid bills and/or receipts, you need to keep the paperwork under control. Start by purchasing a twelve-month expanding file. When you pay bills
for, say, June, place them in the June section of the file. You’ll come back to June twelve months later. If you haven’t needed to look at the bills in that time, it’s highly unlikely that you’ll ever need them again. Shred them. The same system works for receipts. Another simple, very low-tech solution to organizing receipts is to use two bankers’ spikes. Get in the habit of cleaning receipts out of your wallet or purse daily. Place receipts on one of the spikes as they come in. When one spike is full, start the other. If you haven’t needed any of the receipts in the time it takes you to fill a spike, chances are you never will. When you fill up the second spike, throw out all the receipts on the first. (See Tax Stuff for what bills and receipts to keep.)
These methods ensure that the huge amount of paperwork that bills and receipts amount to over a year can easily be managed, quickly accessed, and kept in a tidy and organized way. It’s simple—all it takes is commitment and discipline to make the system work.
Filing
The road to good organization is paved with discarded filing systems. File cabinets can be sneaky. They masquerade as organization solutions, but while they’re better than random stacks of disorderly papers, they don’t automatically solve the problem. Why? Because part of the problem, strangely, is that a file cabinet can hold so much paper that the temptation is to fill it, or to file everything. This is a mistake! Remember that 80 percent of what goes into a filing cabinet never sees the light of day again. Be judicious about what you file and schedule a time each year when you go through your files to get rid of those things that are outdated or no longer needed.
Invest in a good filing system
Use a stable, well-made filing cabinet and consider one of the commercially available systems like File Solutions or Freedom Filer that help to keep paperwork in order by providing pre-labeled files that cover every aspect of home operation imaginable. These systems organize and manage your personal and family papers and take any guesswork out of setting up an easy-to-use and complete system.
Clearly label your files in a logical way that enables you to quickly and efficiently retrieve any information you need. If you’re ambitious, color code them like the professionals do—whatever you do, choose a system that will work for your particular situation. Once you file something, it can be very easy to totally forget where it is, or even that it exists. A good filing system ensures that you can quickly and confidently lay your hands on any important piece of paperwork without raising a sweat.
SUGGESTED FILING CATEGORIES
Automotive—maintenance and repair details, warranties, purchase details.
Education—copies of transcripts or degrees. Report cards, school details.
Financial—credit cards, bank statements, investments, tax returns, and retirement funds.
Health and medical—details of coverage, medical practitioner contact information, dental records, tests performed.
Home and real estate—house purchase details, home improvement ideas, copies of receipts for work done on property, investment property details.
Insurance—house and contents policies, car insurance, life insurance, disability insurance, or any other policies you may have. Paperwork related to any claims you have filed.
Legal—important documents such as passports, birth and marriage certificates, copies of wills and trusts.
Work—employment contracts, résumés, work benefit program details.
Taxes—one file for each year’s return and supporting paperwork.
The above categories can be expanded or subdivided to meet your specific needs. Some additional categories:
Child care services
Entertainment
Events/birthdays
Family history
Food/wine
Pets
Retirement planning
Travel and vacations
Appliance and other manuals
Warranties
Don’t file everything
I recently worked with a family where the mother had a fear of losing any important piece of paperwork. The problem was that everything seemed important to her; she didn’t know where to draw the line. When we started looking at the immaculately kept filing system, I discovered that she had even filed receipts for meals from fast-food places for the last twelve years! Choose what you file carefully. If in doubt, speak to an accountant or other financial professional who can offer some advice on what to keep and what to let go. Consider marking items with a “keep until” date so that you have a clear idea of when to discard time-sensitive paperwork. Remember—it’s likely that you’re only going to need a fifth of what you file anyway, so choose carefully before sliding that paper into your file cabinet where it may linger, completely unnecessarily, for years.
Be efficient
Keep frequently used files (bank statements, car insurance) handy so you can quickly and easily access important information. The top drawer of your filing cabinet should contain the files you need the most, including receipts, bank statements, and other paperwork you’ll want for this year’s tax return. Store old tax files in a less accessible place (you’ll only need them again if you’re audited). Consider assigning a drawer to each family member and one drawer for common paperwork. Make labels for the outside of each drawer of your filing cabinet so you can see at a glance what that drawer contains.
If you don’t need it—get rid of it
Don’t let your filing cabinet become a paper burial ground. Cull your files once a year to get rid of outdated and unwanted items. It is imperative to purge your filing cabinets on a regular basis for two reasons—first, to get rid of old things, but also to refresh your memory of what is actually in there. Trust me—it can be a surprising exercise!
Tax Stuff
The concern that Uncle Sam may come knocking on our door to conduct a tax audit strikes fear into our hearts. Keeping your financial records in order and knowing that the supporting documents are easily accessible should allay that fear enormously. The government provides clear guidelines for what records we need to keep—it’s our job to make sure we’re organized enough to meet those standards and it’s really not that difficult to do.
FYI—IRS SPECIFICATIONS
You can download a publication of the IRS about what paperwork to keep. Go to www.irs.gov and search for Publication No. 552.
Here are some broad and fairly conservative guidelines for managing your bills and financial records for tax season and audits. My official disclaimer is that you shouldn’t take my word for it and should check with your own accountant or financial advisor in your state to verify that this information is up-to-date and accurate for your location and situation.
Tax Trash Calendar
Every month:
Toss out ATM, bank deposit slips, and credit card receipts (unless you may need them for audit purposes) after you have checked them against your bank or credit card statements.
Toss out receipts for minor purchases—unless there is a warranty or refund involved.
Every year:
Toss out your monthly bank and credit card statements (unless you require proof of deductions for taxation purposes)—most credit card companies provide a year-end summary that you can retain.
Toss out monthly mortgage statements provided you receive a year-end summary of your account.
Toss out pay stubs after they are checked against your W-2 or 1099.
Toss out your W-2 and 1099 forms from seven years ago and earlier.
Toss out canceled checks and receipts or annual statements for:
Mortgage interest from seven years ago and earlier.
Property taxes from seven years ago and earlier.
Deductible business expenses or other tax-deductible expenses from seven years ago and earlier.
Keep indefinitely:
Annual tax returns.
Year-end summary statements from financial institutions.
Receipts for the purchase of any investments you own.
Recei
pts for home-improvement costs or major purchases that may be needed for insurance claims or similar.
REALITY CHECK—CREDIT CARD DEBT
It may not seem obvious, but there is a connection between debt and clutter. I’m not talking about home, school, or car loans. Those loans tend to have reasonable interest rates, but credit card debt is a real devil, and it is always the result of inappropriate acquisition of goods. The average American family owes $9,200 in credit card debt. Some of us get sucked into credit card debt when we’re young, unemployed, and/or vulnerable. Who can blame us when companies are aggressively marketing credit cards to college students and bankruptcy filers? With credit cards at their disposal in college, kids try to duplicate the standard of living they had with their families. They develop a sense that they can acquire whatever they want. Kids come out of school and instead of starting from scratch, they are starting out with debt, and the worst kind: credit card debt. And once you’ve got a little debt, it’s a hard habit to break.
When it comes to managing your credit cards, you need to establish routines and set limits. Sound familiar? It’s the same thing I told you to teach your children. Limited space equals limited toys. Limited funds equals limited spending. Trust me, no matter how much you want that stereo or that new car, excess spending will bring you more grief in the long run.