Image via Wikipedia
One of the best things you can do to get financially fit in this year is to get yourself financially organized. So many of us want to whip our finances into shape, yet the task seems especially daunting because most households are overwhelmed by mounds of paperwork. But wouldn’t it be great to have an easy, workable system for organizing all your financial documents – like those numerous credit card receipts, old bills, tax records, and quarterly investment statements? Well, here are some tips from a few experts that will help you get a handle on all your paperwork, streamline your home or office, better balance your time, and enhance your records and document management skills. As of today you’re going to create an easy-to-use filing and financial record-keeping system.
Being Organized Helps Your Finances
In case you need any motivation, first consider all the benefits of getting rid of piles upon piles of paperwork and creating, for example, a decent filing system for your financial records. In the book “Let Go of Clutter,” author Harriet Schechter says well-organized people can eliminate clutter and the stress related to it. They can also prevent piles of mail from accumulating, shed sentimental stuff without regret, and manage “mental clutter,” she says.
Creating an Effective Filing System
To make an effective filing system, experts recommend alphabetizing your relevant documents by subject or category. But don’t make the mistake of having too many or too few categories. Adozen broad categories should be the maximum in any filing system, Schechter says. Therefore, a sample file index might include categories for:
- Banking records (including checking and savings accounts)
- Bills paid (where you file regular monthly expenses)
- Budget (for itemized listings of all your expenses, income and assets)
- Credit cards (useful for storing receipts, statements and contracts)
- Insurance (auto, health, life and property insurance records)
- Investments (such as 401(k) and mutual fund reports)
- Mortgage
- Receipts
- Taxes
What To Keep – and What To Throw Away
Once you’ve gotten your files labeled, you may wonder how long you should keep certain financial documents. “As a rule, you should keep old tax records for at least seven years because that’s how far back the law allows the IRS to go when it wants to audit you,” says David Bach, a New York financial advisor and the author of Smart Women Finish Rich.
You should also hang on to your stock, bond and mutual fund statements indefinitely – mainly because if you sell any of those investments later, you may need to demonstrate the cost basis of your investment to the IRS. Bach notes, however, that you don’t need to keep those prospectuses that mutual fund companies mail you each quarter, so you can safely toss those.
Additionally, Schechter says “when it doubt, throw it out,” when it comes to things like magazine articles, seminar handouts and other “resource” materials you may have collected over the years.
Next – Day 12: Set Up a Good Filing System (Part 2)
This Article Answered The Following Questions
- Sample home paperwork categories
- how to do a good filing
- what filing system should i use in a debt company
- home paperwork catergories
- how to file home paperwork
- how to motivate yourself to organize and get rid of piles of paper work
- how to setup a fiing system for health insurance company
- How would you set up a good filing system?
- organize all your financial documents and create a workable filing system
- sample filing categories
