7 Ways Disorganization is Costing You BIG MONEY

Today I was answering our member message boards and one of our members mentioned she had a "find that paper" crisis this weekend that almost cost her $300. Whew! Dodged that bullet!

This story brought to mind the enormous cost of disorganization. I hear examples of loss like these all the time:

• Late fees paid because the bill was lost or was not attended to in a timely way: Conservatively, $10 each time, possibly way worse! Not to mention the damage this does to your credit rating, affecting interest rates of future purchases.
• Lost checks and cash: If it's your tax refund check or your paycheck, that could be a lot of money... and we have found $20 bills in many a purse in many a closet. We once found over $5000 in uncashed checks and cash in a client's home, some of it in unopened mail and some stashed in books for hiding! Lost gift cards and gift certificates are further costs in lost opportunities, and they are really about the same as cash.
• Duplicate purchases: Some clients don't realize they already have four black turtleneck sweaters, and when they see one on sale, they grab it. Now there are five. Cost? Probably hundreds per year at least, depending upon your spending habits.
• Spoiled food & dining out: If you don't get organized and plan your meals, you'll find yourself eating out more frequently, costing possibly hundreds more dollars per month, and groceries you do buy may spoil if you don't plan your time properly to cook them. (Added to this is the hidden cost of your health: Dining out often means eating more unhealthful foods and larger portions, adding to your waistline and your health care costs over time.)
• Lost or late papers: Like our Clutter Diet® member mentioned above, lost paperwork can be extremely expensive. (And I am just talking residential-- the cost to companies is much more!) Lost rebate opportunities, lost warranty papers, important letters, delayed insurance filings, lost receipts, late responses... these add up to hundreds if not thousands per year, again depending upon your situation. 
• Forgotten charges: You may have a gym membership you never use, or an insurance policy on an item you no longer own... charges like this rack up fast. Let's just say you have $25 a month in charges like this-- that would already be $300 per year.
• Your valuable time: How much is your time worth? If you are an entrepreneur, an attorney, a doctor, or other professional, it could easily be calculated at hundreds per hour. (Moms: Try this Mom Salary Calculator!) Others are harder to calculate, but one thing is certain: Time is the one resource that can NEVER be replaced. You can lose money and get it back, but if you lose time, it's gone forever. So if you are backtracking across town on errands, chasing down those lost pieces of paper, or hunting for your keys, you are wasting time that could be used for things more important to you. Cost? Priceless.

What do you do about it? In my opinion, the most important system to focus on first if you want to reduce costs is your paper management system: How you handle incoming papers, process them, store them, retrieve them, and discard them. Papers are tied directly to financial matters, and they cause the most stress because they just keep on flowing into your life like a mighty, unstoppable river. Read previous paper management articles on the blog by clicking here.

The next important system to focus on is your time management. Time and paper/information are inextricably bound together, and focusing on one without the other is like working with one hand tied behind you. You want to manage your schedule to allow time to manage that paper and deal with those financial matters. They are so easy to procrastinate! Read previous time management articles on the blog by clicking here, especially the series I wrote recently on the Five C's of Time Management.

Thirdly, you want to focus on household management. You can set up systems for meal planning, purchasing, and administration of other typical family business. Read more about household management on the blog by clicking here. 

I would be the most horrible businessperson in the world if I did not point out here that getting help from our team of organizers online is WAY CHEAPER THAN ALL OF THIS!  :)  You can get personal, unlimited, direct help from the experts in our member message boards to solve these issues. Right now we are running a never-before-offered special on our annual memberships that works out to $8.00/month, through Friday 4/9/10 only, with the code "spring." Read more about that by clicking here. I'm just sayin'.

What are your financial disorganization nightmare stories, or near-misses? Share in the comments!

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Comments

[Craig (@TMNinja)]

Lorie,

Love it! It amazes me that most people do not equate disorganization with costing them money.

It is a direct relationship in some cases.

I recently had an experience where I saved $1000, (yes that is correct), on a quote that a contractor had given me, because I was able to produce the paperwork from 13 months ago.

Maybe that is an extreme example, but your message is right on target...from late fees to uncashed checks.

Craig

[Hazel Thornton]

Thanks Lorie,

Now I don't have to write this article, because you already have!

Yours is one of my "favorite pages" which I gladly share with my friends, fans, and clients.

Hazel

[Michelle]

My disaster stories are too long to really go into, but one of my biggest issues has always been with businesses. I seem to attract a lot more "oopsies" than most people (I mean oopsies on their part, not mine), and it really kills my time, energy (on stress), and money. If I can go a whole week without some company making a mistake on my bill/transaction/product, I might be able to clean out my storage unit.

My other major issue is my difficulty childproofing my home. It's hard to store things I use everyday that I don't want my children grabbing. We rent, so childproofing mechanisms that require a drill/screwdriver is not an option. Adhesive child proof products don't last long at all. Most organization and storage solutions are not designed with toddlers in mind. I find myself wasting a lot of time cleaning up unnecessary messes and looking for items I swear one of the kids had (like my car keys), and I waste a lot of money re-purchasing items that were wasted, broken, or become lost. The items most susceptible to this problem... Silverware, paper towels, spices, lids to my pots and pans, items from the fridge, clean clothes in chest of drawers and dryer, dirty clothes in the laundry baskets, neat looking baby items (binky, bottle, temporal scanner/thermometer, electric aspirator), important paperwork, car keys, loose change, office supplies, dvds and cds, books, etc.

I've already read your Clutter Diet book, fabulous, but I'm to the point where I need professional help on a custom level, so I'll be joining up here soon. But these are the recurring disasters I face.

[Carole]

When it comes to home management, cleanng, diet, meal prep - I'm a master. But I lose it with the paper. There is soooo much paper! That's always been my downfall. You'll love this one -

I was doing my taxes and looking for the last utility bill that I swore I put in a certain pile on my desk. I searched through all the piles, and guess where I finally found it? Filed where it was supposed to be in the 1st place! Groan....