Organize Your Financial Docs
One of the most powerful ways to get your arms around your finances is to have a record keeping system.
My favorite “success” story came from a friend who spent a weekend to organize her financial documents prior to seeking a crucial loan. She brought her record keeping file system (similar to the left image) to her meeting with the loan officer. He informed her that the application process takes about three weeks to allow time to gather the required information. She asked, What do you need? And within a half hour, she handed him everything he needed and her loan was approved within 48 hours!
Record Keeping: How to Organize your Financial Documents
1. First distinguish between permanent and temporary documents. Permanent documents contain viable information that you typically maintain beyond a year, or even indefinitely (such as vehicle titles, real estate deeds, and legal certificates and agreements). Temporary documents are usually more transactional in nature (such as utility bills, receipts, statements, and deposit slips) for a current year.
2. Keep your permanent financial documents organized by the 12 essential financial areas identified in the Living Money System, both physically and digitally, as practical. Start by sourcing an expandable 12 pocket file organizer with custom tabs. Print the Financial Docs Checklist, label your tabs, and gather those documents (or a 13 pocket file organizer to include all of your identification and other legal documents)! Keep the organizer in a fire proof safe or other secured space. Scan your documents to create a digital back-up in a secured file folder (organized the same way) on your computer. Note: Feel free to refer to digital documents on your checklist rather than printing duplicate copies.
3. Keep your temporary financial documents organized by year, both physically and digitally. Grab a file folder or a box and maintain your temporary documents as needed for personal and tax purposes. Temporary documents may also be attached to transactions in your accounting software program(s).
4. Dispose financial documents safely to avoid exposure to identity theft. Be sure to cross-cut shred any financial documents that contain your personal information (such as social security number or account numbers).
I promise the sense of wellbeing you will gain is absolutely worth your effort, not to mention the ease you will feel whenever you need to provide financial information to your financial advisor, accountant or creditor.
An Invitation
Organize your financial documents. Dedicate time to get organized all at once or build your record keeping system over the year. Each month update new documents, as applicable. Make this a life-long practice!
Join the Community Discussion
Share your experience of organizing your financial documents, along with any additional record keeping strategies.
Copyright © 2020 Jen Lightwood