Organizing Your Way Out of a 3 Ring Bind

clear-view-smThere is a time and a place for three ring binders. Simply put, when you need to bind reference material, you should use one and when you don’t need to bind reference material you shouldn’t. So what would be some good examples?

If you wanted to collect reference material on, say organizing, it might make sense to use a narrow three ring binder, with dividers, so you can actually find what you want, when you want it. If, on the other hand, you want to keep old investment statements, just in case, a binder is not a good answer.

If that’s what you do, you’re in good company, and I know why. Investment companies and banks tend to send their statements with three holes punched in them, which obligates you to put them in a three ring binder. This is a terrible idea. Why?

Staying organized is dependent on a plan for movement, in a series of manageable, reliable stages. Circulation prevents accumulation. After a year (max) your financial statements should move on to at least a more remote location, possibly the shredder, to free up more space for newer statements. When these statements get into big bulky binders, they tend to stay in them, wasting valuable shelf space.

Shelf space can be better used for, among other things, smaller binders with valuable reference information, that you might actually refer to, once in a while. That’s quite different than trapping old statements in binders, that you are only keeping just in case. So where should all those statements go?

For starters, if you trust that you can access these statements online, you can choose the paperless option and toss the old ones. If, however, this is not a reliable process for you, then the traditional file cabinet is the answer. I keep all statements only in center-tabbed folders, to distinguish them from information (left tabbed) and records (right tabbed), so that I can quickly drain my file cabinet of statements, when tax season is over. It takes me less than 20 minutes.

That’s a plan for movement, to help you stay organized. Binders don’t offer a plan for circulation, only accumulation.

Oh and if you keep buying new binders, it gets expensive!