Personal Finance: How to Organize Financial Documents

Personal Finance: Storing Financial Documents - as part of the expert series by GeoBeats. Nowadays, we have so much information, and that we have to keep track of it all. So a lot of people are very overwhelmed by all the personal finance documents. There are tax returns, insurance policies, pay stubs, statements, etc. Well, a good rule of thumb for your tax returns is, “Keep them forever.” You need to keep your tax returns forever. However, the supporting documentation—like statements and receipts—only need to keep those four years. And then there is usually the need to, on a monthly basis and annual basis, reconcile statements and receipts. With your credit cards, once a month, make sure everything is there. If everything is okay, and the receipts do not have a tax impact, you can throw them away. The ones that do have a tax impact, keep with your tax information. Same ways with bank statements—keep the stubs on a monthly basis. If it is something you purchased and you need proof, then you need to keep it. If it has a tax impact, then keep it with your tax documents. As far as investment statements and IRA statements, you need to keep those from the start of the purchase until you sell that actual investment. And then, with respect to the IRA ones, you need to know if it was pre- or post- tax. And those have tax implications as well. In addition, credit card statements, same way-monthly, reconcile. Pay stubs—on a monthly basis, keep track of those, or every time you get a pay stub. At the end of the year, reconcile those with a W-2 because you will need that for your taxes, and make sure that is accurate. Some companies offer stock purchase plan. Again, keep those statements as well as reconcile those with your pay stubs. There is real estate. Keep your, what is called, closing statement as well as receipts for improvements to the home. In addition, there are your policies for your home. There are utility bills. Utility bills—you may want to look at the trend. Look at every three to four months and make sure that there is not anything that has gone wrong or the rates have increased. And if you are actually someone who has a home office, you will need to keep those for a year and keep them with your tax return. As far as property, the declaration page-you want to keep those every two years to make sure there are not changes or things have not gone up dramatically. And you may need to reassess your policies. And make sure you have adequate coverage. The policies themselves, as far as what is covered-both for life insurance, property, or any other kind of insurance-those you want to keep as long as you have the policy intact. And then, the other thing you might consider, is that you have a personal archive or a portable archive so things like the critical statements—your wills and possibly even passwords or something, or especially your policies—that if something were to happen and you have to evacuate your home, you want to be able to quickly take those things with you.