Financial Record Keeping

If you are like most people, you have mounds of receipts and papers sitting on a desk or overflowing in a shoebox. Having an organized system for your financial records will save you and your family time and aggravation in the future.

If the shoebox organization system is not working for you, then the time has come to dump out the box full of papers and receipts and create an organized financial system. While this dreaded process might take several hours or days, once it’s done, the sense of satisfaction you will feel will make it all worthwhile.

Where to Store Your Records

The papers in your shoebox will vary by importance, ability to replace, and need for accessibility, and, therefore, should be stored accordingly. The following list outlines some of your record storage options:

    • A safe deposit box is the safest, most secure storage option. You can rent a small safe deposit box at most banks for approximately $10-$50 per year. Jewelry and other valuables can also be stored in your box. You should consider the laws of your state surrounding access to your safe deposit box after your death to help you determine what items to keep in your box. Some states allow your executor access to your box, while others seal it until the contents can be inventoried and reported to the Internal Revenue Service (IRS). All states allow access by the remaining spouse if the box is owned jointly. In either case, it is always a good idea to keep copies of all of your important papers in your home files or with your executor so your family can carry out your last wishes. For more information about this, see the U.S. Federal Deposit Insurance Corporation article, The Key to Your Safe Deposit Box.
    • A fireproof safe gives you the convenience of having your important papers at home, while providing protection against fires and burglary. When purchasing a safe, be sure it will protect paper against the heat of a fire for four hours.
    • A file cabinet is one of the most important components of your financial record keeping system. You don’t need anything fancy, just something large enough to store all of your records. It is imperative that the file cabinet be kept in a convenient location to make it easy to maintain your system. Be sure to clearly label all of your files so that documents are easy to find.
    • A box in the attic is great for records that you may want to hang on to, but do not need to be readily accessible.
    • The circular file, more commonly know as the trash can, is where you dispose of all the files and papers you find you no longer need to keep.

What Records You Should Keep

Now that you know the types of storage available for your records, lets discuss what you need to keep and where you should keep it. The categories we will explore include personal papers, insurance policies, tax returns and receipts, paycheck stubs, bank records, monthly credit card statements, receipts, appliance instructions and warranties, retirement plans, investments, real estate documents, debts, money owed to you, and other important documents.