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Personal Finance Organizer
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Wouldn’t it be great if there was a hand-held digital assistant that organized your finances the way it organized your calendar? Until that day comes, you’ll still need to find a system that works for you and to stick to it. Whether that system involves color coded folders, expandable files or computer software, really isn’t important. What is important is that your system is easy enough to use all year long.
Clearing out the clutter will make organizing your personal and financial records a whole lot easier. The following tips will help you in determining what items to keep and what to toss.
- Unless medical receipts exceed 7.5% of your adjusted gross income, there is no need to save them after you have filed your taxes for that year.
- Canceled checks should be saved for three years.
- Documents pertaining to buying, selling or improving your home should be kept as long as you own the home.
According to David Rhine at Sagemark Consulting, “If you are a typical taxpayer with wage or salary income and the bulk of your tax payments are withheld from your paycheck, then you can usually throw away income tax returns and back-up material after three years; which is generally the statue of limitations for an IRS audit.” Consult your tax advisor regarding your own situation.
Consider investing in a small fire-proof filing cabinet to store your most valuable paperwork – deeds, wills, savings bonds, etc. If your goal is have a paperless filing system, make sure that you back-up your computer regularly and invest in a good security program to prevent criminals from obtaining sensitive information.
Getting your financial house organized is a great way to reduce stress and reduce costly mistakes that eat into your disposable income.
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