Part 1: The Importance of Keeping Good Records

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Have you ever gone to the DMV, waited in line forever, only to get up to the counter to realize you did not bring correct documentation for your license or registration renewal?

I have. It can be so frustrating.

Maybe for you, it wasn’t the DMV. 

Maybe it was proof of the address needed for a new bank account.

Maybe it was the insurance card for the doctor’s (or dentist, or vision) office.

Maybe it was the wrong record for the wrong kid, where you brought Alex’s social security card when you really needed Sam’s.

Perhaps it was as simple as forgetting where you put that fishing license for that year. 

Our lives come with a lot of documentation. It’s unavoidable, yet sometimes we don’t take the time to properly store and keep as good of records as we should. And unfortunately, going to doctor’s offices, enrollments, or DMVs aren’t the only reasons you need readily accessible documents. 

Do you handle all of the finances in your household? Have you ever thought about how your family would sort through your finances if something were to happen to you today? Would your spouse even know login information for your utility accounts to continue bill pay on his or her own? Not to be morbid, but being prepared by keeping good records can save your loved ones a lot of headache on top of already a lot of heartache.

Furthermore, it’s not only in final arrangements that good records must be kept. Consider how much more time-consuming it would be if you needed to get a replacement birth certificate or social security card. In my day job as a financial coach, I usually meet with clients who are in financial crisis. I’ve seen firsthand how a missing social security card or other document prevents them from receiving much needed public benefits in a timely matter. Unfortunately, during a financial crisis, it is often easier to leave the mail unopened and pretend the bills aren’t there than it is to face the bills head-on. This leads to a lack of good financial records. I cannot tell you how many individuals I have assisted in organizing piles and piles of documentation. Bills have been thrown aside, property renewal letters trashed, and personal identifying information lost that could have easily fallen into the wrong hands.

All of this to say: Keeping good records of your important documents is crucial. Whether it be to lend a hand to your loved ones, or just to aid yourself in the mundane, make sure that you are covered with accurate and organized records. After all, what good is having that documentation if you can’t find it when it really counts?

So what can we do? Let’s GET ORGANIZED!

Consider creating a “Financial First-Aid Kit,” as I like to call it. Get a binder, or use some other organizational system, ( I personally use these folders!) so that if something were to happen to you today, that binder would provide someone the important documents to settle your affairs. Some basic examples of items for your Financial First-Aid Kit are: 

  • Personal identification
  • Accounts information
  • Insurance and estate plan information
  • Medical information

This collection doesn’t necessarily have to be a physical filing system. It can very well be electronic, or even just a detailed list that points where to go (like a safety deposit box at a bank) or who to ask (such as a spouse or trusted family member) to find all pertinent information.

This also doubles as an easily accessible filing system for the documents you need every time you head to the doctor’s office or renew your vehicle tags. Plus, in the world of technology, it’s a great place to store all of those accounts with pesky login information in one place!

The importance of keeping good records is not only so that you yourself can have an organized financial life, but it’s also so that a family member can easily pick up where you left off if need be.

Wondering how to organize all of your documents or where to start in creating your very own Financial First-Aid Kit? Stay tuned! Tomorrow I’ll cover HOW to organize your financial documents, in Part 2 of GET ORGANIZED!

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DISCLAIMER: Although I do have experience in the personal finance field as an Accredited Financial Counselor® professional, I am not a registered financial planner, advisor, or investment agent. Budget Blueprints and any content or resources made available on this site is for informational and entertainment purposes only. I am sharing my personal experience which may not be applicable to others. I am not liable for any losses or damages related to actions or results related to the content in this website. If you need specific financial advice, consult with a licensed professional financial advisor/planner who specializes in your specific need area.