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Welcome back!
In case you missed it, check out GET ORGANIZED // Part 1: The Importance of Keeping Good Records before reading on about how to organize your important documents.
Let’s dive in to how to put together your very own Financial First-Aid Kit so you can rest easy knowing that your important documents are safe and organized. Being conscious and diligent with good record-keeping skills is a great indicator of financial health. Organized records will save you a headache if you need documents in a pinch, and they will — worst-case scenario — aid your family in final arrangements in case something happens to you.
Where to store records: Paper, electronic, or a mixture of both!
Electronic — Scan originals of bills, insurance policies, and copies of identification and store them on a secured personal computer in organized folders. Take precautions to keep your data safe by password-protecting any Excel workbooks that contain account information, or store all files on a flash drive that’s hidden in a safe or safety deposit box. Don’t forget to back up your electronic records!
Paper records — Keep all documents organized in folders you store at home in a file cabinet, binder, expandable folder, or something similar. I personally use these folders and love how many pockets they have. Keep them out of sight in a locked cabinet or closet. Be sure to keep your most sensitive records (birth certificates, social security cards, passports) locked away in a safe or safety deposit box to guard against a home break-in or nosy guests.
How long do I keep records?
For most items, the documents you decide to retain just depend on your preference. If you are solely filing everything electronically, you don’t necessarily ever need to throw anything away. The below timelines are the general rule of thumb for document retention:
- Indefinitely: Originals of personal identification and marriage licenses
- I highly recommend making copies of these as well, just in case. If stored in the household, make sure the original records are in a fire-proof safe. Store the copies in a separate envelope or location, like a safety deposit box.
- One year: Monthly bank statements
- Seven years: Taxes and other important financial documents
What should be in my Financial First-Aid Kit?
Personal:
- Social security cards
- Birth certificates
- Passports
- Emergency contact information
- List of medications and doctor contact information
- Marriage license
- Copy of any wills, estate plans or healthcare/financial power of attorneys
- Military records
Insurance:
- Renters/homeowners policy
- Auto policy
- Medical/HSA/dental/vision policy
- Life insurance policy
Financial:
- Bank accounts information
- Credit cards information
- Debt balances and information
- Bills and account statements
- Retirement account information
- Copies of tax returns, W2s, and related document
- Copies of rental agreement/mortgage
- Beneficiary information for accounts
- Safety deposit box contents and location
- Vehicle title and registration
Government Benefits:
- SSI/SSDI award letters and statements
- Food stamps, WIC, TANF award letters, and renewal information
- Medicare/Medicaid
- VA benefits
The list goes on. However, the above document suggestions should get you on your way to organizing your financial documents. Click here to download your free Accounts Organizer to help you jump-start your newly organized financial life.
A final tip: Once you have your Financial First-Aid Kit set up, don’t forget to update it when you get new records or when life circumstances change. At the very least, emergency contact and medical information should be reviewed once a year.
What do you think?