|
|

Personal Recordkeeping
Summary
Personal
documents, household records and important legal papers accumulate
continually. A recordkeeping system will
help you gather and organize financial information, decide where information should be kept, and review and discard unneeded
records.
INTRODUCTION
In addition to
your school paperwork, your personal financial paperwork may be piling up. What is the best way to organize all those
papers? What should you keep and what
can you discard? This Financial
Awareness Bulletin provides an overview of how to organize and what to keep.
KEEP THE RECORD STRAIGHT
Personal documents, household records and important
legal papers accumulate continually. A
recordkeeping system will help you organize the important records concerning
your household financial affairs and keep track of your personal finances and
hard-to-replace documents. Another
benefit to having all of your tax records and documents in a designated place
is you can efficiently prepare your tax returns.
Recordkeeping can help you save time and money while
giving you peace of mind. Keeping
orderly records will help you locate payment documentation when required, such
as to prove payment of child support or medical bills to insurance companies,
or to obtain warranty coverage. You can
also document losses for fire damage or theft for insurance claims.
Setting up a recordkeeping system involves three
steps:
I.
Gather
and organize financial records.
II.
Decide
where each type of record should be kept -- in a home file or safe deposit box.
III.
Review
and discard unneeded paperwork.
I. Organize
Financial Information
Organizing important personal records will make money
management easier for you and for others who may be responsible for handling
your financial affairs. When you
organize financial papers, the first step is to locate all of the documents and
related information such as phone and account numbers. Gather information in categories such as:
§
Legal.
Wills, living wills, powers of attorney, donor information, estate
planning documents, death certificates, adoption papers, citizenship papers,
military service records, and Social Security cards.
§
Medical.
Physician and dentist information, current prescriptions, allergy
information, doctor/hospital bills, insurance cards.
§
Life & Health.
Copies of policies for term life, whole life, employer-provided health
care, individual health care, Medicare, and Medicaid.
§
Auto/Home.
Copies of policies for auto casualty/liability, personal property,
declaration sheets, homeowners/renters, claim records/numbers, agent
information, flood/earthquake.
§
Banking.
Bank accounts, check registers, bank
locations/contact names, safe deposit box numbers/keys, money market accounts,
certificate of deposits.
§
Retirement.
State pensions, annuities (403b), individual retirement accounts,
stocks/mutual funds, government bonds, Social Security payments, total assets.
§
Personal Expenses.
Store charge cards, bank credit/debit cards, school/auto loans, closed
account confirmation letters, rent payments, warranties.
§
Personal Valuables.
Certificates, appraisals, and photographs of antiques, jewelry,
art/photographs, family heirlooms, rare books, recordings, china/crystal, other
collections.
§
Real Estate.
Architectural drawings/floor plans, deeds, block/lot numbers,
home/termite inspections, mortgages/contracts, land surveys, title insurance,
tax assessments.
§
Titles and Certificates.
Property/vehicle titles, birth/marriage certificates, passports,
legalization papers, children’s documents, pet licenses.
II. Where
to Store Financial Records
Financial records can be kept either in a home file
or in a safe-deposit box at a financial institution. Active records (those used on a regular
basis) and those of limited value can be kept in a home file. Select a convenient place such as in the
kitchen or home office area to keep important household financial documents. A file cabinet that is fire and water
resistant makes good sense. Or you can
simply use an inexpensive cardboard box that holds file folders. Keep it handy, where it can be accessed
easily, probably not on the top shelf of the closet. Consider using a safe-deposit box to store
records that would be difficult to replace (such as those in the following
categories: Legal, Personal Valuables, and Titles and Certificates).
At least one other person should know where your
important records are kept and how they are organized, so in an emergency that
person can locate information quickly. A
logical place to keep this information would be at the front of the active
files. The information should include a
list of items in the safe-deposit box and where the key is located.
III. Review
and Discard Unneeded Records
You will accumulate many financial papers over time,
so it is important to know which to keep and for how long. You should keep the following documents:
§
3 Years: Household bills (paid and unpaid);
receipts for minor purchases; health records; and income tax receipts.
§
7 Years: Cancelled checks; check registers;
bank statements; bank deposit slips; year-end pay stubs; credit-card
statements; receipts and records of deductible expenses; income and tax
paperwork (some financial advisors suggest that you keep a copy of your tax
returns with documentation for at least 10 years). In addition, investment purchase and sale
records should be kept for seven years after the tax deadline for the year of
sale.
§
Permanently: Personal records that provide
documentation of events such as birth, marriage, divorce, death, military
service, adoption, naturalization and medical records. Also, housing and investment records such as
titles, deeds, trust agreements, wills, retirement plan agreements, and power
of attorney documents should be kept as long as the agreements are in
effect. For tax purposes, papers
documenting home purchase and improvements should be kept as long as your own
the property or are rolling over profits into new property.
For those records that you decide to discard, it’s in
your best interest to shred them. You
can purchase a shredder at most office supply or discount retailers. Make sure the shredder is a “cross-cut” model
and has a credit card slot.
#
# #