How to Keep Financial Records Organized

It never seems important to keep financial papers organized - that is, until the Internal Revenue Service comes calling! You'll want those papers at your fingertips, too, if you want to verify a payment or get a loan. Save yourself the panic by getting the job done now.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Safe-deposit Boxes
• File Cabinets
• Accountants
• File Folders
• Fireproof Safes
• Hanging Files
• Personal Financial Software

1. Buy a file cabinet and sturdy hanging folders.

2. Buy manila folders to go inside the hanging folders.

3. Sort all your financial papers into piles and stack them chronologically.

4. Put your bank statements, credit information, bill stubs, paycheck stubs, receipts, tax information, real estate papers, investment papers, insurance policies and statements, loan agreements and any other financial papers in separate hanging folders.

5. Further divide your tax information by year. Include tax returns, receipts, copies of W-2s, 1099s and other pertinent tax information.

6. Divide the bill stubs by the companies they represent.

7. Divide real estate papers by mortgage documents, home improvement receipts, second mortgages and so forth.

8. Put passbooks, car titles, stock certificates and yearly Individual Retirement Account, pension and profit-sharing statements in a safe deposit box. (Store vital documents and valuables there also.)

9. Keep your incoming papers, such as bills to be paid, in a separate place where they can be handy.

Tips & Warnings

• Consult an accountant when necessary.
• Buy a locked file cabinet for extra security.
• If you opt for a home safe instead of a safe deposit box, make sure it's fireproof. Store it out of plain view.
• Keep tax information for at least seven years and other financial papers for at least three.
• Consider buying financial planning software. Some programs include online banking capabilities. Back up important software.
• Keep up with your filing system, or you'll have to organize it all again next year!

[capx197]

on 6/29/2009
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[JadeQueen]

on 12/1/2008 Thanks. I use a credit union that did not sell its loans away and that offers good interest paid on a monthly basis for a checking account that works as savings also. I think it wise to make sure your bank or credit union is highly rated by Bankrate.com or another rating agency before getting a safe deposit box there. If the bank closes, you won't be able to get to your box.

[Sharen]

on 4/3/2008 Thanks. Very valuable information. If not doing our own taxes, the newly found accountant will love us.