Keeping your financial records organized is crucial for managing your personal finances. Whether it’s a utility bill to show proof of residency or a Social Security card for wage reporting, there are times when you’ll need to find a financial document quickly. By organizing your records, you can easily locate what you need when you need it.
What Should You Keep?
If your desk or home office is overflowing with papers, start by asking yourself, “Why do I need to keep this?” Keep documents that are hard to replace, such as:
- Tax returns
- Legal contracts
- Insurance claims
- Proof of identity
For documents that are easily accessible online, like banking and credit card statements, you don’t need to keep paper copies.
How Long Should You Keep Your Records?
Keep financial records only as long as necessary. For example, you can discard ATM and credit card receipts once you’ve reconciled them with your bank statements. Legal documents and those hard to replace should be kept longer, or even indefinitely.
Here are some guidelines:
Keep for one year or less:
- Bank or credit union statements
- Credit card statements
- Utility bills
- Auto and homeowners insurance policies
Keep for more than a year:
- Tax returns and supporting documents
- Mortgage contracts
- Property appraisals
- Annual retirement and investment statements
- Receipts for major purchases and home improvements
Keep indefinitely:
- Birth, death, and marriage certificates
- Adoption records
- Citizenship and military discharge papers
- Social Security card
Out with the Old, In with the New
Prevent paperwork from piling up by discarding old documents when you receive new ones. For example, replace last year’s auto insurance policy with this year’s. Review your files yearly to keep your system organized.
When disposing of records, use a shredder to destroy sensitive information like Social Security numbers and account details.
Where Should You Keep Your Records?
Use labeled folders in a file drawer for traditional storage. Store important documents in a fire-resistant cabinet, safe, or safe-deposit box.
For less space, consider electronic storage. Save online documents or scan paper documents. Keep backup copies on a portable device or hard drive, and ensure your computer files are secure.
You can also use cloud storage services with encryption. Choose a reputable company that offers automatic backup and technical support.
Organize records by category (e.g., banking, insurance, proof of identity) to make access easier.
Create a Personal Document Locator
A personal document locator lists where your financial records are stored. This helps you find documents quickly and assists your loved ones in an emergency. Include:
- Personal information
- Contacts (e.g., attorney, tax preparer, financial advisor)
- Online accounts with usernames and passwords
- Locations of important documents (e.g., home, office, safe)
By organizing your financial records, you can manage your finances more efficiently and find important documents when you need them. If you need assistance with organizing your financial life or have questions we did not cover, please contact C.S. West & Associates of Tampa for guidance. We’re always here for you!
