Organizing Expenses/Income/Personal Finance Documents (Paperless Office)

Question

I've been trying to organize my personal finances for awhile by moving to a "Paperless Office" (PO from here on out), but I haven't been able to reach anything that satisfies my need for intuitive organization and ease of use. My goal of this PO is not to eliminate, but to keep myself from constantly purchasing unwieldy filing cabinets. I've been doing this by scanning all my expenses, deposit slips, bills, etc. Before taking this project up, I had organized my expenses solely on my bills in a small filing cabinet. The way it would look like is this:

Filing Cabinet
    - Bills
        - Rent/Mortgage
            - 2008
                - January Bill
                - February Bill...
                - ...
                - ...December Bill
            - 2009
            - 2010
            - 2011
        - Electric
            - 2008
            - 2009
            - 2010
            - 2011
        - Gas
            - 2008
            - 2009
            - 2010
            - 2011
        - Phone
            - 2008
            - 2009
            - 2010
            - 2011
        - Insurance
            - Vehicle
                - 2008
                - 2009
                - 2010
                - 2011
            - Health
                - Base
                    - 2009
                - Accident (Aflac)
                    - 2009
                    - 2010
    - Projects
        - Website
        - Garden
    - School
        - English 301
        - Art 303
    - Etc
        - You Get the Idea

I liked how things were working with this, except I couldn't keep a record of some of the major communications that I'd get through letters, such as policy changes, rate change letters, account adjustments, things of that nature.

Then I learned that it's a good idea to keep track of ALL expenses (which I do by using a spreadsheet), and to compare them to the monthly bank statements, so I've been making an effort to keep track of each expense, deposit and major communication (not so much the marketing material) by scanning everything and having the file structure like this:

C:\Users\User\Documents\Finances\Accounting
    \2009
        \01
            \2009-01-13 - Receipt - Store.pdf
            \2009-01-22 - Mortgage - Bank.pdf
            \2009-01-25 - Bill - Service Provider.pdf
        \02...
        \...
        \...12
        \2009 Cash Flow.ods
    \2010
        \01...
        \...
        \...12

This set up makes it great for chronological tracking, but then it's painful to trace things based on a specific vendor/service provider/bank/organization. Sure, there's a file search function, but I've always found it lacking, regardless of parameter settings. I've thought about setting up a separate section for bills and base expenses, so that it would look like this:

C:\Users\User\Documents\Finances\Accounting
    \Bills
        \Bank
            \2009
                \2009-01-01 - Mortgage - Bank.pdf
                \2009-02-01 - Mortgage - Bank.pdf
                \2009-02-15 - Privacy Notice - Bank.pdf
                \2009-03-01 - Mortgage - Bank.pdf
            \2010
            \2011
        \Phone
            \2009
                \2009-01-12 - Bill - Phone.pdf

    \Expenses
        \2009
            \01
                \2009-01-03 - Receipt - Grocery.pdf
                \2009-01-06 - Receipt - Mom & Pop Shop.pdf

My only downfall with this is that I can't go through a single folder to set up a spreadsheet for comparing against my bank statements, yet when going single folder (Monthly Expenses+Bills+Communications), it's a little more difficult to separate the wheat from the weeds. Some of my problems stem from the purchase of big ticket items, like a refrigerator. I can scan the receipt and place it in the monthly expense folder, but it seems so wrong to put the Owner's Manual inside of a folder that contains expense documents, and when I really need to read it, how will I even remember it's in that folder?

If you're curious, here are my goals behind this silly madness:

1. Good Documentation (Prevents Desperate Bill Collectors from Demanding Payment for What's Already Paid)
2. Auditing (I Won't Notice $10 Trickling Out of My Account Unless I Deliberately Check)
3. Budgeting Aid (Helps to Provide Framework of Establishing Budgets *On the Fly!*)

I know the "perfect" organization scheme doesn't really exist and is going to be subjective to each individual, but I'd like to know what you've done to organize your finances and how it's worked for you? I'd especially like to hear from those that are trying to get away from the behemoth filing cabinets ^^

P.S. I've read this about tracking expenses and income, but it's not quite about keeping organization of personal finance related documents. One of the answers addressed GnuCash, so I'm thinking about integrating it with whatever organization scheme I go with, so I'd also like to hear from GnuCash users too, please =D

Answer 1

If you're curious, here are my goals behind this silly madness

You said it... The last two words, I mean...:-)

If you're auditing your statements - why do you need to keep the info after the audit? You got the statement for last month, you verified that the Starbucks charge that appears there is the same as in your receipts - why keeping them further? Done, no $10 dripping, throw them away.

Why do you need to keep your refrigerator owner's manual? What for? You don't know how to operate a refrigerator? You don't know who the manufacturer is to look it up online in case you do need later? Read it once, mark the maintenance details in your calendar (like: TODO: Change the water filter in 3 months), that's it. Done. Throw it away (to the paper recycle bin).

You need the receipt as a proof of purchase for warranty? Make a "warranty" folder and put all of them there, why in expenses? You don't buy a refrigerator every months. That's it, this way you've eliminated the need to keep monthly expenses folders. Either throw stuff away after the audit or keep it filed where you really need it. You only need a folder for two months at most (last and current), not for 12 months in each of the previous 4 years.

Answer 2

I'm trying to organize my financial papers as well. I have a Fujitsu ScanSnap and it's tearing through my papers like a hot knife through butter (i.e. awesome).

Here's how I'm addressing organizing the paper.

I'm organizing mine a little bit organically. Here are the main parts:

• I already have some organization, so I'm just taking the folders as they are and scanning them into PDFs more or less as they are. Not a whole lot of microadjustments on what order I scan things in.
• I have a simple naming system. Many of the things are organized by year, so I start with that. Then there's some other descriptor, like my bank's name or the credit card name. Then I add an index if more than one file is needed. That is, 2009_JoeBobsBank_001.pdf, 2009_JoeBobsBank_002.pdf, etc.
• I put the papers back in the folder and write the names of the scan files on the folder in case I need to track down the original for some reason. (I'm just trying to get the papers out of my hair, not get rid of them, but you can get rid of more if you want. Doesn't bother me.)
• The ScanScap software package has an application for making the scanned PDFs searchable under most circumstances. So I don't really need to go through the file pages looking for something. I just use my search prowess to find what I need. The OCR is quite good for printed documents.

So anyway, all that to say that it's not necessary to organize the files to the hilt. If you want to, that's fine too, but it's a tradeoff: up-front organization for possibly some time savings later. The search function available is decreasing the advantage of organizing your files carefully. If throwing all of your files in a digital pile makes your skin crawl, then I won't force you otherwise, but I'm not worried about it for the time being.

What you're doing with the other tracking sounds fine to me. Others may have different insights there.

Answer 3

If it was me, I would organize something along these lines. in large part because down the road when it comes time to purge stuff like small receipts, utility bills etc, you'll be doing it per year, at the 7 year point or something similar.

Year first

Under that major categories such as Mortgage, Utilities, Credit, Major Purchases, Home Improvement, Other

I'd do a monthly breakdown for Other since it's likely to have a lot of little stuff, and bulking it up by month helps to organize it. But I'd not bother with that for the other items, since there's going to be limited items in each one.

If you are scanning stuff on a regular basis, and using a decent naming convention for the receipts, then you could easily sort by date, or name, within any of the larger categories to see for example, all the electric bills. in order.

You might also want to look at a cloud service such as DOXO as an alternative to storing this stuff at home (they also work with a number of companies to do electronic billing etc)

In terms of retention, if you are a homeowner, save anything related to your mortgage and anything that goes towards the house, even little maintenance stuff, and any improvements, as all of that goes against the cost basis of the house when you sell. Generally, after 7 years, you are unlikely to need anything in the way of small receipts, utility bills, etc.

in any case, be sure you have regular backups offsite, either by storing stuff in the cloud such as doxo, or via a regular backup service such as carbonite. you don't want to lose all your records to a house fire, natural disaster, or having your computer stolen etc.

Answer 4

I think your ideas are worthy, at the outset I too started with the idea of having everything organised. It would be interesting to know what system you have now come to 8 years later.

vaguely neuroscientific way of organising:

I find that using electronic tools to manage/track finances is much more flexible and allows to search and analyse better. Here I posted my summary of starting using GnuCash step by step.

In terms of papers - I keep only the important ones (i.e. that can affect my life for amounts at least above a hundred). Topographical/object based filing is what helps me best - so things that relate to the house, things that relate to the car, children, work.

I find that a very important part of the process is discarding or archiving (e.g. scanning) papers that are older than needed. Therefore I manage just with one suspension file drawer. The other topographical trick for archiving - keep your electronic filing folders as similar as you can to your physical suspension files. The only difference there - you will have subdivisions in years inside electronic folders. Physical ones do not need that because you only keep current (by your own definition) papers in the drawer.

As for computer archive file structure - it helps if it is not too deep - therefore I would go for just year divisions inside "children" folder and hope that everything else is visible from the file name you gave. To sort files chronologically you could give names starting with YYYY-MM-DD as in 2019-12-23_Dental_record.pdf. The main thing, I would say, is to not overcomplicate and use what brain is naturally strong at - places and objects.