Organizing Your Financial Documents

By December 27, 2016April 8th, 2020No Comments

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When it comes to important documents, some people are detailed filers and others are “organized pilers”. You know where your documents are, but does anybody else? In an emergency or the event of your incapacity, could your adult children or designated Power of Attorney quickly find the documents and information that they need? Whether you choose to go electronic or stick with paper, there are a couple of steps to follow to organize your financial documents.

Stay Protected
If you make the shift to paperless with your documents, be sure that your home network is secure and that the documents and your personal computer are password protected. Be sure to quickly update the password that is automatically assigned to you during a new internet installation. Periodically update your antivirus software and make sure you have a firewall. If you receive account statements and notifications electronically, consider changing your password every six months to a year, and never access your financial information on a public network! When storing documents electronically, you can either save them locally on your computer or research websites that offer services to store and organize your important documents in one place.

Create a Master List
Handwritten or not, make sure to have a master list of all your accounts along with the proper contact information for each. Include websites, phone numbers, usernames and passwords, and the location of your Estate Planning documents. Your family members or Power of Attorney should know where to find and be able to work from this list if you become disabled or pass away. The master list can be kept in a safety deposit box or saved as a password protected document. Remember to periodically update the list especially after changing passwords!

Review Existing Files
Over time, documents, statements, and other financial information tend to accumulate. Throughout the year, and especially at the end of the year, take some time to review and clean out your existing files. Keep only what you need and shred the rest. Below is a list of documents that should be kept in original paper form in a safety deposit box or fireproof box along with guidelines on when to shred old documents.

Items to be kept in original paper:
· Birth & Marriage Certificates
· College Transcripts and Diplomas
· Current Passport along with a color copy
· Social Security Cards
· Home Inventory (download the SH&J Household Inventory form here)
· Current Insurance Policies
· Current Estate Planning Documents
· Citizenship Papers
· Adoption Papers, Guardianship Arrangements
· Current Medical Directives
· Current Power of Attorney
· Divorce Decree
· Home Purchase, Improvements
· Investments Purchased (cost basis) and sold (if SH&J manages your investments, we keep these records for you)

Shredding Schedule:
· Shred After 1 Month
– Credit Card, Debit Card and ATM Receipts (unless it pertains to tax or warranty information)
– Credit Card Statements
– Utility Bills (unless deductible on taxes)
· Shred After 1 Year
– Bank Statements
– Investment Statements
– Pay Stubs (reconcile to W2 then shred)
· Shred After 3-5 Years
– Year End Brokerage Statements
– Tax Returns and Supporting Documentation

Getting organized up front and keeping current with financial documents not only makes it easier for you to track important information, but also for your loved ones when they need to step in and act on your behalf.

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