A few years ago, I remember participating in a business seminar on quality management. During the presentation, the speaker described two different types of companies. The first was compared to a hockey game where at the start of each day the puck was dropped and the players chased the puck around the rink in utter chaos. The second business was described as a ballet where all of the movements were planned and well executed.

This story comes to mind frequently as I visit with families to counsel them on their finances. Many of them have not been taught basic organizational skills regarding their finances. As a result, they share "horror stories" of bounced checks and notices from utilities threatening to shut off services because payments were overdue. For these families, money management is like one big hockey game filled with chaos, confusion and anxiety!

While you may not be dealing with the extreme issue of lost bills, are you satisfied with the organization of your finances and other important family administrative areas? Does the frustration level rise each time you sit down to pay bills? More important, if something happened to you, would your wife know what steps to take and where to find everything? Take a look at Exhibit 1 and see which column you can best relate to. Are your family finances more like a hockey game than a well executed ballet? If so, this article is for you.

Good financial management is a skill which must be learned. During our youth, we can all remember taking part in various activities, whether it was playing trumpet in the orchestra or wide receiver on the football team. To what do you attribute your success in these activities? In most cases, it was a matter of learning the basic skills and then practicing those skills over and over until they became like second nature to you. Handling your family's finances is similar.

The following five step plan will help you save time and will significantly reduce the frustration caused by lack of organization.

#1 - A proactive attitude.
#2 - An orderly file system.
#3 - Checkbook management.
#4 - Consistent schedule.
#5 - Budgeting.

In this column, there is only adequate space to deal with the first two steps, so we'll complete the others in the next issue.

Step #1- A Proactive Attitude
It all starts with the right attitude. Let's take a look at what Sacred Scripture and Church Teaching have to say about this topic. As always, Proverbs is filled with wisdom. Chapter 27:23 says, "Take good care of your flocks, give careful attention to your herds." In chapter 24:30-34, we read, "I passed by the field of the sluggard, by the vineyard of the man without sense; And behold! It was all overgrown with thistles; its surface was covered with nettles, and its stone wall broken down. And as I gazed at it, I reflected; I saw and learned the lesson: A little sleep, a little slumber, a little folding of the arms to rest - then will poverty come upon you like a highwayman, and want like an armed man."

The Catechism of the Catholic Church refers to "personal responsibility" (Sec. # 1914) and St. Ignatius Loyola said "Pray as if everything depended on God and work as if everything depended on you." Clearly, the Lord wants us to be diligent in managing our responsibilities well.

If you want your finances well organized, a certain level of commitment is required. However, as you see the benefits of time saved and reduced frustration and anxiety, I think you'll agree the commitment is worth it.

Step #2- An Orderly File System
Once you've committed to getting organized, the next step is to establish a filing system for all of the paperwork that comes your way (I keep hearing about a paperless society, but I haven't seen it yet!). I recommend that your files be broken down into two main categories: current and long term. Since you will refer to your current files frequently, the system works best if they are accessible where you pay bills, such as in file drawers in a desk or a file cabinet close by. On the other hand, you will not need to refer to your long term files very often so they could be kept in a file cabinet in the garage.

I have found that hanging folders with manila folder inserts work very well for home files. You can use the following list as a starting point for your own files, but don't be afraid to customize them for your own circumstances and needs.

Current Files
· Open Items (bills to pay, unreconciled bank statements).
· Tithing/Almsgiving (church envelopes, correspondence).
· Taxes (current year pay stubs, W-2 and correspondence).
· Education(receipts, correspondence).
· Savings (separate folders for bank accounts, retirement plan and other investments).
· Housing (separate folders for statements, property taxes and insurance).
· Automobile (separate folders for each car and insurance).
· Medical Records (separate folders for medical history, current year bills and your policy).
· Insurance (separate folders for life and disability).
· Debt Payments (separate folders for each credit card or loan).

Long Term Files
· Employment (employment handbook, resume).
· Taxes (separate folders for each prior year).
· Savings (separate folders for prior year bank accounts, retirement plan and other investments).
· Housing (separate files for permanent items such as purchase documents, receipts for improvements and prior period property taxes).
· Social Security (separate folders for each family member).
· Estate Planning (separate folders for copies of your will or trust and those of other family members as appropriate).

Next time we'll get into basic checkbook management, tracking of expenses and developing a budget. Your success there will depend largely on how well you have organized. I encourage you to take time now to organize for success!