Financial records are notorious for being messy. Bills, paycheck stubs, tax returns and bank statements have a way of getting tucked into random places. Luckily, there are a few pretty painless ways to organize your important documents.
Put all your financial records in one dedicated spot
To ensure that bills are paid on time, bank statements are reconciled and important documents are properly filed, set aside a specific location in your home for financial tasks. It may be a place where you keep a computer or filing cabinets. Once that area’s set aside, pick a time each week to pay bills, enter financial information into check registers and organize documents.
Organize in a way that makes sense to you
Many people use a computer program to track everyday spending and bank accounts. Others use a pencil and paper. The key is to use whatever system makes sense to you and helps you maintain your finances with a reasonable amount of effort.
Protect the important stuff
Don’t leave your only copies of wills, tax returns, stock certificates or emergency contacts in a pile on the desk. Such documents should be put in a safe deposit box or home safe. Ask your attorney or financial advisor to store the signed copy of your will in a secure location.
Get rid of the documents you don’t need anymore
Many papers (such as regular household bills) can be shredded soon after receipt. Other documents, such as those supporting the cost of investments and real estate, should be retained longer for tax purposes. A general rule for tax returns (and documents that support the returns) is seven years. When it’s time to discard those old pieces of paper, fire up the shredder.
Not sure about what financial records you need for your taxes? Call us up – we’ll talk you through it.