Keeping Track Organization Is The Key To Containing All Your Records In One Place And In Order
Organization is important in every aspect of our lives. And when it comes to our finances, it’s crucial.
A simple filing system is all you need to keep track of the papers, records and bills that are often scattered throughout the house on desks, on countertops, on bulletin boards and in boxes. Once you’re organized, you won’t have to spend much time each month filing, paying bills and maintaining the efficient system you’ve established.
The Home Office
Even if you don’t have a room to devote to a home office, it’s still important to establish a space in the house where you are well-equipped to process all your paperwork. A desk or table, a comfortable desk chair and some accessories for storage are all you really need.
For storage, a two-drawer file cabinet should be sufficient. Or you can use portable filing boxes. Plastic versions are available at office-supply stores. Look for attractive wood and wicker versions at specialty storage shops and housewares shops.
You’ll also need a basket, tray or drawer to store bills and other paperwork until you get to them. Keeping everything in a standard spot reduces clutter and confusion.
The system
Start by sorting records and documents into two categories:
1. documents that are hard to replace
2. active records (such as current bills and this year’s tax materials)
The first category includes wills, birth certificates, marriage and divorce papers, contracts, mortgage records, real-estate deeds, home-improvement receipts (make copies of these for the second category), stock and bond certificates, life- and home- insurance policies, titles for vehicles and paid bills for big purchases such as art and jewelry.
The original of each document should be stored in a safe-deposit box or with your lawyer. Copies can be kept at home in a fireproof metal box that locks.
The two-drawer file cabinet is for the second category: active paperwork. In one drawer, make a separate file for each of your credit cards, bank accounts, mortgage or rental agreements, insurance contracts, utilities and everything else along these lines. Use the second drawer or another filing box for all tax documents, including relevant receipts. (If you have a home-based business, file receipts for rent, telephone, utilities and other things that you may be able to deduct in the second drawer.)
It’s a good idea to make a separate file for any valuable antiques, jewelry or works of art you own. Each folder should contain a copy of the original receipt, a photograph of the piece, a current appraisal and its insurance policy. Review the folders periodically and update them as needed with new appraisals and insurance policies.
Make a point to sit down to pay bills at the same time each month. Once you pay each bill, file the receipt in its folder. When the canceled checks arrive, staple them to the receipts.
Long-term storage
Tax records and all supporting documentation should be kept for six years. In general, receipts for household and discretionary expenses, utility bills, canceled checks for non-tax-deductible items and insurance policies that have no claims don’t need to be kept for more than a year.
However, these receipts are very useful for establishing budgets. Go over them monthly or yearly to monitor your spending habits. Since it’s so easy to add them to the storage box, I suggest doing so. You never know when you might need to refer to them. Add checkbook registers and your datebook or calendar to the box as well.
Label the box clearly with the year, and keep it in a safe, dry place where you won’t miss the room it takes up. If floods are a danger, use plastic boxes and keep them on shelves rather than on the floor.
This system is very simple yet very efficient. Organization is rarely complicated; the only difficult part is getting started.
The following fields overflowed: CREDIT = Martha Stewart New York Times Syndicate