By Kathy Swann

Do you get hit with late fees because you forget to pay your bills on time? Do you constantly waste time searching for that cable bill you left somewhere in the house? Spend an hour organizing your personal bills and papers now, and this will save you time and frustration in the future. Plus, this helps make tax time easier because you already have everything in one place.

First of all, have a place where you sort your mail every day. Junk mail gets trashed or recycled right away. Magazines and catalogs should go in a rack to read later. Open your bills, make a note of the due date and immediately put them on your desk in a small file until you write the check. A small letter file that sits on your desk works well- no need to buy any fancy tickler file unless you think that will work better for you.

It’s best to start in January, but you can begin to set up your filing system at any time during the year. Use a filing cabinet or plastic storage box to store all your files. I prefer a plastic file box because at year end I can carry it to the basement to store with other old records.

If you have more than 10 bills a month, use a separate manila folder for each company you write a check to. I prefer to use the manila file jackets instead because they have closed sides that prevent small receipts from falling out and getting lost.

Create a folder for Miscellaneous for those people or companies you only pay once or twice each year, such as insurance or magazine subscriptions. You can also use this folder to keep those occasional letters you need to write during the year but don’t know where to file them.

Make a folder for bank statements and another one labeled “For income taxes.” As you pay a bill that can be deducted on your tax return (such as real property tax or medical bills), file it in this folder instead of your paid bills file. Name one folder “Investments” for any paperwork that comes regarding your 401(k) or IRA during the year.

If you pay less than 10 checks a month, you don’t need a separate folder for each company-you can manage with only one file folder for all of your bills for the whole year.

Keep all your paycheck or direct deposit stubs in an envelope or folder, newest one on top. I use a regular letter envelope for mine, and always keep them until I verify that my W-2 is correct when it arrives in January.

Pay your bills as you get paid- either weekly or bi-weekly. If you are paid monthly, chances are you will have to pay some of your bills during the month, so schedule time to pay bills every other week. Be sure to allow a week’s mailing time if you pay by check. If you pay online, this chore will be easier, and in most instances you can set up your payment in advance of the due date.

After you write the check or pay online, be sure to mark the bill “Paid” with the date and check number before you file it in the folder you have set up.

At the end of December, create new files so you can be ready for the next year.

By organizing your bills and setting up a filing system, you will wind up spending less time on this chore every week. And, next tax season all you will need to do is pull the file “For income taxes” to begin preparing your tax returns.

Kathy Swann has over 25 years experience in office management, payroll and Human Resources and also works part-time as a consultant/bookkeeper for small businesses. Using her organizational skills, she has helped many of her clients streamline their office systems to save time, money and maximize efficiency. She is the author of "How to Win When You Lose Your Job: A Handbook for Those Soon to Be Unemployed.” Purchase this e-book at http://www.loseyourjob.net