Organize Your Financial Documents
Having your financial documents organized and in a safe place has great practical value, as well as providing ease of mind. Once a system is set up, it can be maintained weekly to keep things in order. With statements, invoices, bills, receipts, and important documents easily retrievable, you can benefit greatly. Contact numbers and persons to solve problems about billing and payments are easily determined. You can track expenses for budgeting purposes. When it comes time to do your income taxes, you or your accountant will have a much easier preparation time. This is something that should be done as soon as possible. These tips will help you set up and maintain an organizational system.
Make a list of the basic categories of financial documents you will need to organize. These include monthly bank statements, retirement account documents, credit card statements, bills, receipts and cancelled checks, federal and state tax returns and supporting documents, house or condominium documents, brokerage statements, acknowledgements for charitable donations, alimony payments, insurance papers. There are other categories that will vary from person to person.
Decide on what method you will use for organizing your documents. Some people file papers month by month through each year. Others organize them by subject or category. It is often helpful to have a folder or bin near your computer or work area as mail comes in. Put bills that need to be paid and other items that need attention and subsequent filing in this location so you can have them instantly available. You may wish to invest in office supplies such as filing cabinets, banker's boxes, folders, a stapler and marking pens.
Find a space convenient to your work area to store the documents you will be working on each week. This can be in a drawer or cabinet you already have, or you can purchase a filing cabinet or storage box. For longer term storage of documents you don't need to consult frequently, find an area that is safe from activities or conditions that could possibly damage them but where they are still accessible. For really important papers that can't be replaced, consider keeping them in a fireproof container or place them in a safety deposit box.
Set a specific time each week to pay bills, review and file documents. If you pay bills by computer, print out the payment confirmation sheets. It helps if you create a pleasant workspace for yourself to encourage you to spend time there. If you get behind -- illness, visitors, or unexpected events -- allow a longer period of time for catchup.
Label your files clearly and acquaint family members with where short-term and long-term storage is located. Make sure they know what your filing system is like and how to use it in case of your absence. Show them or tell them where the file of irreplaceable documents is so they can grab it in case of fire or possible evacuation.
The danger of identity theft is very real. Dispose of anything with account numbers or personal information by shredding it first. If you are a gardener, shredded paper can be added to compost piles rather than sent to the ground fill.
Once your filing system is set up, you will settle into the process of keeping it up and making refinements as you work on your system. This is an ongoing commitment that will repay you with added security, safety, and peace of mind.
