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Be Financially Organized Blog

27 February, 2017



If you’re like me, every year at this time I promise myself to do better on organizing my financial records.  It’s all part of pulling my income tax records together for my accountant.   Try as I might,  inevitably there will be some record or receipt that’s on top of the dresser or in one of several piles in my office.   My office is pretty small, so sometimes I just have to “go up” as the paper comes into the room.   It’s like the skyscrapers in New York City.   The system I have in place works well, even though I don’t always put things where they belong.  I always find them.

The thing about being financially organized…you’ll be in a position to make better decisions.  Your family will, too, in case you aren’t around.  Whether it’s financial planning, budgeting, debt or investments, being able to put your hands on whatever you need means you’re not wasting time finding what you need.  If your tax preparer asks for your 1099 for the dividends and capital gains on that non-retirement mutual fund you bought a few years ago, can you put your hands on it?   Or if your financial planner wants to double check to see if your beneficiaries are up-to-date on your investment accounts and insurance policies, do you have them on a list somewhere?  No wonder people hate dealing with this sort of thing:  they have to spend hours just trying to find things.  Don’t be a hater.    (:

You’ll have some paper receipts and records in file folders.  Others you may store online (make sure they’re backed up).  A good rule of thumb is to keep your tax records for seven years.  I actually have every tax return I’ve ever filed.  When I was filing my 2005 (I think) return, I actually pulled them all just to see the income growth (and dips) through the years.  It was very interesting, and helped me check the income taxes paid on a recent Social Security statement at the time.   Social Security, by the way, had everything correct.

Here’s some other ideas:

Organize investment statements by type:  IRA statements, 401(k) statements, mutual fund statements.  I’d keep the year-end statements

*  Any concerns about being audited?  Then keep your bank statements for the last three years

Mortgage documents?  Keep them until it’s paid off (if you’re lucky) plus seven years

Social Security benefit statement:  they aren’t mailed to you three months before your birthday anymore.  But you can register online at www.ssa.gov and get your statement there.  It’s easy

Medical records and health insurance:  The consensus is you should keep these records for five years after any surgery or major procedure.  If it’s a tax deductible expense, keep the records for seven years

College planning: keep a copy of the completed Free Application for Federal Student Aid (FAFSA), just to make sure.  And keep your statements for any college savings account(s) in their own file

So, get to it!  It won’t be so bad.  Now’s a great time, while you’re pulling your income tax info together.  Your system doesn’t have to be perfect.  But progress will give you a great feeling.  Good luck!  Until next time, here’s to good planning!

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