Organizing Your Financial Records

I get a lot of questions about financial statements, the most common of which is, How long should I keep them?

Before I say anything else I recommend you contact your accountant and attorney to find out which financial documents you need to keep and for how long.

I have introduced many people to my filing system for dated household papers. The system I recommend reduces the amount of time you spend dealing with paperwork by 50%. This system has two stages:

STAGE 1

The first stage focuses on your active paperwork. This is paperwork you need to do something with other than just file it away. It is still active. For active paperwork, I recommend using a literature sorter or wall pockets. These require just one swift motion to put the paper away. Keep your literature sorter at the location you tend to bring in the mail and set it down. Two of the cubbies in your literature sorter should be labeled To Be Paid and To Be Filed.

STAGE 2

The second stage helps you deal with paperwork when it becomes inactive. This is when you are done using it for the time being, and you just need to file it away for future reference. It is now inactive. For this stage I recommend 12 hanging files labeled JanuaryDecember. You file each item according to the month it is dated.

Here are some tips on dealing with specific types of financial documents

Monthly Checking Account Statements: When you first receive your checking account statement in the mail, put it in the literature sorter in the cubby labeled To Be Paid. That way, when you are ready to pay your bills and balance your checkbook, you find your bank statement with your bills.

After you balance your checkbook, you are ready to file your statement away with the other paperwork that has become inactive. File it in the appropriate month. If your checking account statement was for January 8th through February 8th, it would be filed in your January file because it is Januarys statement.

When you clean out your files each year, I suggest you contact your bank and ask them these questions:

* How long does the bank keep a record of your statements?
* How accessible to you is your statement information should you ever need it?
* How easy is it to get a copy of your statement from the bank should you ever need one?

Find out if it would be easier to get statement information by calling your bank or by going online. Would it be easier than digging through all your old papers to find your own copy? Sometimes it is. On the rare occasions you need access to old statements, it may be more practical to pay 75 cents to request a copy from the bank than storing it yourself.

Also, it may be more practical to let the bank store it for you rather than dedicating your precious storage space in your home which costs you some amount of real money per square foot to purchase, heat, light, tax, and clean. If it is, then shred your checking account statements when you clean out your files at the end of each year. If it is not, store your old checking account statements in your storage room. Keep them for seven years.

Savings Account Monthly Statements: When you first receive your savings account statement in the mail, put it in the literature sorter in the cubby labeled To Be Filed. When your To Be Filed cubby gets full, transfer them to your files labeled January- December according to the date of the statement.

When you clean out your files at the end of the year I suggest you ask your bank the same questions mentioned above. Ask them what circumstances will you ever need your old savings account statement information? In most instances, the savings account statement has already served its purpose by the end of the year. You really dont need to hang onto your savings account statements longer than that. Shred or store your statements according to your conclusions after speaking with your bank.

Monthly Credit Card Account Statements: When you first receive your credit card statement in the mail, put it in the literature sorter in the cubby labeled To Be Paid.

After you reconcile your statement and make your payment, you are ready to file your statement away with the other paperwork that has become inactive. Again, file it in the appropriate month.

When you clean out your files at the end of the year, I suggest you contact the bank your credit card is through and ask them the same questions. Take the same actions as listed above.

Credit Card Receipts: When you first receive credit card receipts, put them in the literature sorter in the cubby labeled To Be Paid. When you are ready to reconcile your credit card statement, pull out all your credit card receipts to be reconciled then staple them to the credit card statement they belong to.

After you reconcile your statement, you can file them in the monthly files with your other inactive paperwork. Keep them with your statement until you are ready to shred them.

Debit Card Receipts: Handle debit card receipts the same as you handle credit card receipts; only, use them to reconcile your checking account statement. Staple them to and store them with the statement.

Good luck implementing these simple steps. Youll see a big improvement in the time savings and the reduction of papers in your files. Its a great feeling!

Christi Youd is a Professional Organizer, Author, Speaker, and the President of Organize Enterprise. She operates her web site and free newsletter at http://www.OrganizeEnterprise.com. Christi specializes in helping people get rid of their clutter and organize their lives for success at home and at the office. Check out her free Special Report 25 Quick Tips To Finally Get Control Of Your Messy Environment (Without Lighting A Match!) now at http://www.OrganizeEnterprise.com/25QuickTips.Almire Blog71895
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