Spring is just about here and that means it’s time for spring cleaning. Beyond simply cleaning your house, this is a great opportunity to get your financial paperwork in order. Keeping sufficient records and updated copies of important paperwork is vital to your financial wellbeing. In the event of an emergency, having important papers organized is just as important as having an emergency savings fund.
The first thing you must do is gather original copies of your important documents. If it isn't possible to obtain an original copy of a document, get a certified copy. Once you have the necessary documents, be sure to keep them in a safe, yet easily accessible place - either a secure paper filing system or a trustworthy online space. The following information can help you determine what to keep and what to toss.
Retirement planning documents – Documents pertaining to IRA, 401(k), 403(b), or TSA statements should be kept in a secure location, such as a safe deposit box. Keep the annual summaries until you retire or close the account.
Tax planning documents – According to the Internal Revenue Service you should keep your individual tax return documents for seven years. You may also want to save W-2s. Paycheck stubs can be shredded once they are checked against your W-2.
Financial documents – Checking and savings accounts, bank and credit card statements, and bank information are important paperwork to have, but should be kept in a secure location. Bills for big purchases, such as furniture, computers, etc. should be kept in an insurance file for proof of their value in the event of loss or damage. Any unneeded financial statements should be properly disposed to avoid identity fraud.
Asset protection documents - In the event of an emergency, you’ll want to make sure your tangible assets are protected as well as your most valuable asset—yourself. Make sure you have updated, accurate records of medical, home, and life insurance policies and statements. Documents pertaining to buying, selling, or improving your home should be kept as long as you own the home.
Estate planning documents – It’s important to have a copy of any wills and power of attorneys. These are documents that your attorney should also have on file.
Shuffling through a pile of paperwork is a daunting task. But it is well worth it to make sure documents are properly filed and stored. Getting your financial house in order now will ensure peace of mind down the road.