Beyond the New Year’s Resolution: Keeping Your Financial Paperwork in Order, by Wealth Manager, Clint Gharib
New Year’s resolutions can be great motivators, but any time of year is good to get your financial paperwork in order. Managing your important documents—whether electronic or on old-fashioned paper—can make your financial life easier.
If this is the year you said you’d finally get organized, or you need pointers to get ready for taxes, here are some areas where any organization may pay off. Oxford Retirement Advisors Integrous Investing assists clients in many of these areas.
- Taxes: Whether you work with a tax professional or complete the forms yourself, having your documents in order can help avoid expensive mistakes and missed deductions.
- Credit rating: When you’re organized, you’re more likely to keep up-to-date on payments and avoid late charges.
- Health: Organized medical records mean you can easily find proof of coverage, receipts to take advantage of your flexible spending account (FSA) or health savings account (HSA), and important information for family members.
- Disaster recovery: Know where key documents reside and be ready in case of emergency. If you live in a high-risk area, be sure to review this comprehensive resource from the Red Cross, Disasters and Financial Planning: A Guide for Preparedness and Recovery.
- Your financial identity: When you stay current, it’s easier to spot problems—and even identity theft—before things get out of hand.
Start with the right tools.
- File folders and storage cabinet for papers you are going to keep.
- Shredder: You’ll save loads of time and energy disposing of unneeded papers quickly and safely. Pro tip: invest in the cross-cut type.
- Scanner or smartphone app: If you have or would like to get a scanner, that’s great, but having a smartphone means you’re ready to scan. There are many highly rated scanning apps (many of them free) that you can download to create PDFs.
- Safe deposit box, or fireproof storage for your home.
- Digital storage for your scans: It can be on your computer, or through a secure cloud service (hint: you may want to store photos this way, too). Make sure to regularly back up your storage to safeguard your archives.
- Gather up your papers and block out a couple of hours to start.
- Start by dividing your papers into categories: Keep Forever, Keep for Limited Time, and Discard.
Keep Forever. These are the papers that are difficult or potentially impossible to replace. You probably have hard copies, but now is a good time to scan backups as well. You’ll keep these in a home safe or your safe deposit box—you can use folders to organize them if you have enough room.
- Birth certificates and adoption papers
- Citizenship and naturalization papers
- Death certificates
- Divorce papers
- Educational records
- Family history
- Funeral and burial plans and records
- Marriage certificates
- Military records
- Patents and copyrights
- Powers of attorney
- Property appraisals, deeds, titles, and easement papers
- Social Security cards and numbers
- Wills and trusts
Keep for Limited Time. Usually, this means for at least seven years, or as long as you have a relationship with the asset or business entity. These are the working files you may need regularly, so they are candidates for file folders and a filing box or drawer. Hint: keep that filing area visible so you’re more likely to use it.
- Business ownership papers
- Charitable donation receipts
- Credit card end-of-year statements
- Employment records and identity cards
- Insurance policies
- Investment and pension records
- Medical records
- Mortgage statements
- Receipts for major purchases
- Subscription information
- Tax records (keep these for seven years to be safe, according to the IRS)
- Veterinary records
- Warranties, guarantees, and owner manuals
Discard (securely). You can safely get rid of these items but be sure to shred them to avoid identity theft.
- ATM slips, after checking your statements
- Credit card receipts and statements: Save the receipts until you’ve reconciled them with your statement and save the statements until the end of the year, when you can save only the last one for each account.
- Paystubs: Save until you reconcile with your W-2.
- Coupons you didn’t use
- Credit card offers (by the way, if you are overwhelmed with junk mail, you can opt out of most general junk mail through DMA Choice and stop unsolicited credit card offers through OptOutPrescreen.com.
Finally, although family archives and photos may not be part of your financial well-being, they are near the top of the list of what most people want to save first if disaster strikes. The U.S. National Archives “How to Preserve Family Archives and Photographs” has valuable information on storing and digitizing these precious parts of your family history.
Now that you’ve divided and conquered those papers, take a few steps to keep up the good work and eliminate any backlog. Make a “paperwork date” of an hour once every month—including your family members in the process—to go through and handle papers you haven’t been able to get through during your week. Evaluate where you store your files, both physically and electronically, to be sure your needs are met. Don’t be afraid to change tactics to ensure your papers get filed regularly. You’ll be glad it’s taken care of as you prepare for tax season, discover your expensive refrigerator or camera is still under warranty, stay up-to-date on your bills, and plan a more secure future.
If you have questions about managing paperwork for your investments or discussing your future goals, please contact my office today to schedule time for us to meet. Call 404-479-8136 today to qualify for a complimentary financial review.
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