How to Get Your Financial House in Order

Be even more informed with these tips for keeping a close eye on your finances.

More than 50% of American adults fail to maintain a budget or track their spending. And when asked to grade their understanding of personal finance, 41 percent gave themselves a C, D, or F.1 That’s why it’s important to be proactive about keeping your financial affairs in order.
When asked to grade their understanding of personal finance, 41 percent gave themselves a C, D, or F.1
Between your monthly budget, retirement savings and investments, keeping close tabs on your personal finances may seem like a full time job. But it doesn’t have to be. We’ll help you take control with these tips:
Set financial goals. Think about setting both short-term and long-term goals based on your circumstances. Then create timelines for achieving your goals. For example, your short-term goal may be to pay off your child’s wedding or refinance your mortgage in the next six months. Longer term, begin to maximize contributions to your retirement fund.
Get organized. The more carefully you create an organizing system, the easier it will be to use. Gather all your financial paperwork. Shred anything that’s outdated, then sort and file the rest in folders by category in a spot that’s easy to access. Or keep electronic records by scanning documents onto your computer and backing them up. In general terms, keep tax records for seven years; auto documents for as long as you own the vehicle; and certificates of life events such as marriages or home purchase and improvement documents indefinitely.
Create a budget. You’ll be better able to see where your hard-earned dollars are going and stick to your limit. Take the guesswork out of budgeting with a monthly expense/income planning worksheet (PDF)* and track every expenditure for a full month or more. Use those figures to compare expenditures in areas such as housing costs, utilities, loans, grocery, and clothing against monthly income.
Enlist an advisor. A trusted financial advisor can help you manage your investments and help you identify and stay focused on your financial goals. Among the things an advisor can do are help you set goals, minimize your taxable outlay, and adjust your long-term plan as circumstances change. If you don’t have an advisor here are steps to consider and questions to ask, when you sit down to talk with one.

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