With the end of year coming you want to make sure you have all your finances in order! This will help you come tax time! This will also help you to be able to see your whole financial picture and where you stand financially. While there are a lot of software programs and websites today that help you organize your finances (free tax software, online banking, tax programs etc.), I still think it helps to have an “old fashion” paper filing system as well. This is what I recommend you have in it:
Building a Filing System
Use hanging files with folders within them to separate the different items and sort them as following:
Tax Returns- Put all your tax returns into this folder
Retirement Accounts- Put retirements papers into this folder
Investment Accounts-if you don’t have any you can leave this one out, you can put in the kids 529 accounts etc in this folder as well.
Savings and Checking Accounts-I advise people to go paperless but it’s good to keep at least one statement for each account in this folder even if you have to print it out once every 6 months or so.
Home Accounts-Keep your Mortgage Papers, inspection papers, warranties, If you make any major changes to your home (new roof, etc.) keep those receipts and paperwork here as well in case you ever sell your home, or need them for warranty or insurance purposes.
Insurance- Keep your life insurance papers, home owner’s insurance papers, car insurance. You can even keep your health insurance information here as well.
Credit Card DEBT- Keep a folder for each credit card you have. If you have paperless statements; which I recommend, print out your last statement because REMEMBER, you will not be adding to this balance any more. Put those statements in each folder and use a marker to write on the folder the balance just so you are reminded of it! Each time you pay off a card you can cross out the debt amount and be happy!
Other Debt: Keep student loans, car loans, etc. in this folder in separate folders in this hanging file as well.
Family Will & Trusts- Put Family wills and trusts into this folder
Now if you own a small business you will also need files for that as well in separate folders, its important for you to keep them separate especially come tax time.
If you currently have everything ”paperless” or in an electronic version, you can do a paper system as well and just print out your statements etc and put them in the files as a reference. This is also good because if something were ever to happen to you, your loved ones would be able to look at the paperwork as they wouldn’t usually have your Password etc to your online programs.