Organize to save money and time
Reliable financial information can be easily obtained by properly organizing and storing records. Organized records save time and money and permit easier fact gathering. With tax season here, organization may help prevent overlooking important documents or having to amend tax returns later.
First, you need to choose a system for organization that works for you. Simple is often best—recordkeeping does not have to be a complex system. One simple solution is a notebook or an accounting ledger. You can use this notebook or ledger to record all your financial information, account numbers, contact information, as well as personal information, such as family medical history and wills/estate plans.
Next, decide what records you need to store and how long you need to keep them. To prevent your files from running over, set aside time each month to purge or update your records. For example, the IRS suggests individuals keep copies of tax returns indefinitely.
Another consideration is where to store your organized information. Some hard-to-replace records may be safely stored at home in a fire-resistant safe or file cabinet. Other records should be kept in a safe-deposit box available for rent at your Credit Union. These include birth and marriage certificates, passports, insurance policies, military records, real estate property deeds and trust documents. (It may prove to be quite costly to reproduce or duplicate certain records.)
Whatever system you use for recording your pertinent personal and financial information, make several copies and store them in separate places. However, make sure that your spouse, family members or a close friend knows where and how to access your records.
How Long Should You Keep Records?
- Tax returns - Permanently.
- IRA documents - Until funds are withdrawn.
- Credit Union records - From one year to permanently. Keep checks related to your taxes, business expenses, and housing and mortgage payments.
- Bills - From one year to permanently. Keep bills for big purchases (e.g., cars, jewelry, electronics, etc.) for proof of their value.
