Organizing Your Financial Records

Are your financial records and personal documents under control?

Getting your financial data and records organized is the first step in designing your financial future. Without a good sense of what you have and why it´s significant, you have a much bigger job when it comes to planning for retirement, buying a home, or investing. The following table will help you organize your documents and records.

Record or Document Type Description How long to keep Maintenance
Short term records Household bills, credit card statements, receipts for minor purchases. At least three years. Clear out files once a year. Throw out records, statements, or receipts that are no longer relevant or which have been reconciled.
Long term records Check registers, bank statements, pay stubs, tax records and returns.
Insurance policies (while in force), car titles, house records and deeds.
Inventory of household goods and assets.
At least seven years for all tax-related records or until the asset is sold. Organize in a file cabinet. If you don´t like file cabinets, consider organizing information in plastic sleeves in a 3-ring binder. You can have binders for various accounts, tax records (by year with their returns), insurance, health care information and medical expenses, and inventory. Color coding can really help. Use binders to organize warranty info too. House-related expenses can be organized by improvements or interest.
Permanent Birth certificates, wills, powers of attorney Forever or until replaced by a revised document.  
Database Account information such as Quicken records. Ongoing. Archive at intervals. Keep a backup so if your system crashes you won´t lose all your data.

Information can be organized anyway it makes sense to you, but keep in mind that it´s probably more manageable if you organize it by how it will be used. For example, you may want to incorporate your household inventory with a section for warranties. The warranties need to be filed with the original receipts. If you use the binder approach, set up the first section for inventory, then subsequent sections for major appliance warranties and receipts. Depending on the number and type of appliances you have, you might want to add the maintenance booklets to the same section. If you have a lot of stuff, it may take several notebooks or file folders.

To be really proactive, consider setting up a binder or folder with all the instructions on where things are located in the event of your death. If you leave your family information on where the insurance policies can be found, bank accounts, as well as the location of your will and your lawyer´s name, you will make their lives infinitely less complicated. A word to the wise however: Never put records like wills, insurance policies, or powers of attorney in safe deposit boxes. If you die, no one can get them out easily.

Regardless of your approach to organizing your information, none of it will be helpful unless you can find it quickly when you need it. If the IRS comes knocking at your door or a hurricane demolishes your home, good records will simplify your life and speed any claims that might be necessary.

Related Links

More Home organization including getting a handle on books, CDs, and videos.

If you need financial assistance, Diamond Peak Mortgage and Loan may be able to help.

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