Keeping Good Financial Records
Your records tell your life story. They all have an important place in telling who you are, where you've been, and how responsible you are with your money. Records keep you informed of your financial situation, tell the government how you spend, and advise your family of your wishes if you can't tell them yourself. With this much information vested in records, it's clear that good organization is a must.
Are You Keeping Records as Well as You Should Be?
To find out, ask yourself the following important questions:
- How easily could a friend or neighbor find an important document in your home?
- How often do you have to look in multiple locations to find any document?
- How safe are your most important papers? If there was a fire or other disaster, are they likely to be destroyed?
If you're unsure, it may be time to re-evaluate your record-keeping system or start a new one from scratch. Before you begin, though, take a minute to organize your thoughts. The most effective system will be the one that has the most meaning to you.
Understand that all your records can be important, not just the ones you use most often. Consider the following types of records and their roles in your life when developing an organizational plan:
Everyday Records
This includes items like your driver's license and Social Security card, any proofs of insurance, membership cards, and emergency medical information.
Personal and Family Records
This includes records of your insurance policies, wills, passports, and certificates of religious milestones.
Legal Records
This includes birth and adoption certificates, death certificates, records of military service, marriage and divorce records, and citizenship documents.
Property Records
This includes deeds and other certificates of ownership for homes, cars, recreational vehicles and burial plots, property easements, mortgages, and loan records, as well as an insurance inventory of valuable property.
Financial Records
This includes relevant receipts and proofs-of-purchase, income tax archives, records of loan and mortgage repayments, and budgetary ledgers.
Not all of your records should be stored and organized in the same way. Some need to stay on your person for everyday use. Others would be best kept in a personal, fireproof safe or in a safe deposit box at a bank so as to ensure their preservation. Certain documents, like tax records, medical records, and family memories would be best kept at home for easier access. Use your discretion to decide the best methods for storing these documents, and have confidence that your important information is safe.
