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Business

The Key to Organization Is Keeping Things Current, Experts Say

Mission Wealth Management workshop offers advice on reducing clutter, and managing spending and portfolios

Whether there are papers stacking up in the file cabinet or PDF files cluttering a hard drive, the key to organization is keeping things current, according to Radiant Organizing owner Sara Caputo.

There are two reasons why things stack up — a lack of decision-making and systems, Caputo said at the Mission Wealth Management Financial Organization Workshop for Women on Tuesday at the Santa Barbara Club.

“Your systems should reflect how you think and your current life, because the No. 1 killer of organization is not keeping things current,” said Caputo, who organizes vertical files by categories and sub-categories.

Speakers discussed document organization, how to go paperless, spending and portfolio management.

Caputo recommended keeping tax returns, forms, canceled checks and receipts for seven years because the Internal Revenue Service has six years to challenge a return.

When it comes to bank records and bills, go through them every year, and unless they are bills for big purchases or records of housing payments, taxes and business expenses, discard them after a year, she said. Get rid of credit-card statements and receipts after 45 days if they aren’t related to taxes, Caputo added.

Find a home for every physical document and file it vertically, she said.

“The anatomy of a well-functioning office system is in, out, working and pending,” Caputo said. “The ‘in area’ is where things come at you and sit in one place until you are ready to work on them. Your brain doesn’t want to think about things in more than one place; that causes distraction and confusion.”

The working area is in the middle of the desk and contains what needs to be done now, while the pending area is anything in process, “that’s most of our stuff.” The out section contains papers that are finished.

Caputo also uses the hot, warm and cold system: keeping documents that need attention nearby or in the inbox, others that aren’t as immediate in a separate folder, and archiving less important documents.

Broadview Mortgage branch manager Kelly Marsh followed Caputo with a talk on transitioning from paper to digital.

Workshop participants worried about backing up their information, human error and the effort it takes to transition.

She recommended organizing Outlook email into rules, which automatically send emails with specific subjects into a separate indexed folder. While it does take time to scan documents, organizing and searching digitally is much easier, Marsh said.

“It can sound overwhelming, but I don’t think it has to be,” she said. “It’s not complex software, so if you wanted to bring in a stack as stuff, let us know and we can scan it for you and save it as PDFs.”

MWM Business Development Director Dannell Stuart ended the workshop with a discussion on spending and portfolio management. After her talk, she told Noozhawk that one of her goals was to go paperless.

“I’ve purged a lot of files, but I want to go paperless,” Stuart said. “It’s just knowing how to store things by chronological or subject, it’s finding the time to call the cable company and say stop sending me statements and have everything sent electronically.”

Stuart advised delineating fixed expenses, or ones that are necessary to maintain a basic standard of living, and discretionary expenses, or ones that can be adjusted.

After figuring out monthly spending and income, Stuart talked about the “90/70/30 Rule” in regards to a sustainable retirement income. At least 90 percent of the fixed expenses in retirement should be covered by predictable income like Social Security or a pension, less than 70 percent of an investment portfolio should be allocated to predictable income and at least 30 percent of the portfolio should be allocated to growth investments.

Stuart also recommended an annual withdrawal rate between 4 and 5 percent, and treating an investment portfolio as a future employer.

“I know it’s easier to dig our head in the sand and not pay attention to how our money is invested or how it’s being managed, but if you were to consider your portfolio as an employer, in that it will provide a steady paycheck to you in your retirement, you will think about your portfolio in a different way,” she said.

Noozhawk staff writer Alex Kacik can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @NoozhawkBiz, @noozhawk and @NoozhawkNews. Connect with Noozhawk on Facebook.

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