Six bright ideas for money management

1. GET ORGANIZED: Tackling the overload of financial paperwork can be daunting. For some, it’s simply a matter of sorting it into file folders: Bills to Pay, 2014 Taxes, Donation Receipts, Credit Card Statements. That way, it’s readily accessible, not stuffed in a drawer or piled on your kitchen counter.

“Paper in a home office is one of the biggest challenges,” said Grace Bamlett, owner of Organized Outcomes in Orangevale, Calif. She recommends creating 12 file folders for monthly bills, labeling them January through December. The following year, when the first January bill goes in, you can shred the old one, unless it’s needed for taxes.

For those who like visual cues, she suggests buying colored files: Purple for bills, blue for health insurance, green for investments, etc.

Buy a “good quality” filing cabinet, she said, not a cheap version that’s apt to jam, break or tip over. And don’t get hung up on formal labels. “Make your files speak to you: Use labels like ‘Stupid Stuff I Gotta Do,’ “ if that works.

It’s also a good time to start gathering your 2013 tax paperwork, everything from last year’s charitable donations to childcare deductions. Sorting it now can save a lot of last-minute scrambling ahead of the April 15 tax-filing deadline. And further eliminate the paper mountain by shredding old utility bills and credit card statements once you’ve cleared them with your monthly or end-of-year statement.

2. ‘DECLUTTER’ INVESTMENTS: If you’ve got multiple bank and investment accounts scattered among different financial institutions, now’s the time to consolidate them, says Jane Bryant Quinn, a longtime personal-finance columnist and author who writes for AARP’s monthly magazine. “Everyone is better off if they simplify their financial lives,” Quinn said in an email. She suggests making a list of all your accounts: annuities, mutual funds, bank accounts, insurance policies, retirement funds.

If you have a couple of IRAs, roll them into one. If you have a handful of checking, savings or money-market accounts, consider putting them under one roof.

The benefits are many: First, you can avoid fees by having multiple accounts at the same bank or financial institution. It can also save you — or your heirs — from having to locate lost accounts. “Tons of money is sent to the states every year because people forget bank accounts they left behind,” noted Quinn. “If you’ve hung on to a checking or savings account because it’s a pain to move, I’m speaking to you.”

Same with simplifying your stock and mutual fund accounts. In general, Quinn said, experienced investors gravitate to mutual funds, rather than lots of individual stocks. Even with the market’s blockbuster success last year, you can get stuck with duds.

Shed your losers, Quinn said. “Any time is a good time to get rid of the dogs. I wish I had a dollar for every widow who thought her husband was an investment genius, then opened what he left and found a lot of crazy stocks he could never admit to. If he sold (the dogs), he’d have harvested tax-deductible losses and (could have) reinvested in something smarter, like a well-diversified mutual fund.”

Generally, Quinn recommends owning a handful of diversified, low-cost index funds: a broad U.S. fund, a small-company fund, an international fund and an intermediate-term bond fund. Spread your money among them as you see fit.

And look for low-fee funds. Paying 2 percent on a $250,000 mutual fund portfolio “is like writing a check for $5,000 every year,” plus more if it’s bought through an investment adviser, said Quinn. “With index funds, you could pay $60 or less.”

3. TRY TECH TOOLS: Maybe this is the year to try one of the personal finance online tools, like Mint.com or Manilla.com, which help organize your financial life by tracking your spending/saving, monitoring your accounts, and setting financial goals. They’re also free. A new entrant is Finovera.com, whose money tools include alerts when a credit card charge is duplicated or your utility bill seems unusually high.

Also, consider signing up with your bank or credit union for email or text alerts when an account is running low or a bill is coming due.

4. TRACK YOUR PENNIES: Not literally, of course. But if you’ve never tracked your daily spending, it can be an eye-opener. Write down all of your spending for two weeks, from your morning coffee to fast-food drive-thrus to weekend movies with the kids, said Jana Castanon, spokeswoman for Apprisen, a Columbus, Ohio-based network of consumer credit counseling centers.

Why two weeks? “Any longer than that, people lose interest. It’s to figure out where you’re nickel-and-dime-ing yourself. . After two weeks, you’ll have a general idea of your spending patterns and can see where you can cut back.”

Castanon tried it herself a couple years ago and discovered she was “a Starbucks-aholic,” spending $3 or more on daily coffees that unknowingly added up. “Most of our frivolous spending is mindless spending that’s part of our routine,” like a $70-a-month Starbucks habit, she said. When casually swiping a debit card for a soda and bag of chips at a convenience store, “it doesn’t even dawn on you that it might add up to hundreds of dollars a month — that you don’t even know you’re spending.”

Once you’ve identified your money leaks, try switching to cash. In other words, don’t cut off your weekly coffee, but limit yourself to fewer a week or a fixed amount.

5. BUMP UP RETIREMENT: Increase what you’re socking away for retirement. If your company offers a match for your 401(k) contribution, be sure you’re putting in enough to hit that match, which is essentially free money. Or simply boost your current retirement contribution by 1 percent, especially if you got a pay raise. “If you have it taken automatically out of your paycheck, you’re not gonna miss it,” Castanon said.

Those in their 20s and 30s, who are juggling rent, school loans, mortgages and/or kids, may feel it’s too hard to set aside something extra each month for a far-off retirement, or even an emergency savings account for the unexpected — car repairs, medical emergencies, etc. But start the savings habit now, she said, no matter how modest. “If you readjust your spending, you can put a little bit away. Start small,” she said. Even it’s only $5 a paycheck or $20 a month, start putting something into a retirement fund or an emergency savings account.

6. CELEBRATE TINY SUCCESSES: Too often, ambitious goals — lose 50 pounds, learn to speak fluent French — can be overwhelming, setting us up for certain failure. Instead, start with “baby steps,” says Apprisen’s Castanon. Do the little things. Don’t say, “I’m gonna save $150 a month.” Rather, start by not eating out for lunch one day a week. “Once you have that success (saving $10-$12 a week), start building on it.”

Above all, stay positive. “We often get to the end of the year and start thinking about the things we didn’t do,” the former credit counselor said. Instead, celebrate your successes. “They may not be triumphs or the goals we wanted. But if you took some steps to get there, celebrate those.”