Organize Your Financial Documents

Wednesday, December 30, 2009

I learned this tip on organizing our financial documents from this book:

First, get at least 13 hanging file folders—12 if you don't have children—and file folders to put inside of them. Label the 13 hanging file folders as follows:

1. Tax Returns: Put eight file folders here, one for each of the past eight years. Label each file by year and put all tax documents such as W2s, 1099s and especially copies of tax returns you filed. As a rule, you should keep old tax records for at least seven years in case the IRS audits you.

2. Retirement Accounts: Keep a separate file folder for each retirement account you or your partner have: IRAs, 401Ks, and review your investment options annually.

3. Social Security: Put your most recent Social Security Benefits Statement in this file folder. If you haven't received one by mail, visit to request one online.

4. Investment Accounts: Put the statements you receive for individual and joint investment accounts that you and/or your partner have that are not for retirement in separate folders: mutual funds, brokerage accounts, or individual stocks.

5. Savings and Checking Accounts: If you have separate file folders for your checking and savings accounts, create separate file folders for them. Keep your monthly statements here.

6. Household Accounts: If you own your own home, create a separate file folder for: your home title; home improvements (keep receipts for home improvements for as long as you own your home); home mortgage statements. If you are a renter, this folder should contain your lease, the receipt for your security deposit and receipts of your rental payments.
I also put all the house related bills: electricity, HOA, water, etc inside this file under different folder.
7. Credit Card Statements: Create separate file folders for each credit card account you and/or your spouse partner have. Keep all your monthly statements in them.

Other Liabilities: All other debts such as your college loans, car loans, personal loans, etc. should have separate file folders for loan notes and payment records.

9. Insurance: Create separate file folders for health, life, car, homeowners or renters, disability, long-term care, etc. with the appropriate policy and payment records.

10. Family Will or Trust: This should have a copy of your most recent will or living trust along with the contact information of the attorney who set it up.

11. Children's Accounts. For every child you have, create a file folder for each college savings account or other investment that you've made in their name.

12. Finishrich Inventory Planner:In this folder you will have a copy of your net worth. Complete the worksheet found on page 279 of the book to help you determine your net worth. Or click here

13. Total Income: Do you know where your money go? The worksheet on page 275 of the book to help you get a grasp on your cash flow. Or click here