Sue's husband, Fred, was even less organized than Patty. He left managing the finances to Patty. When Mike and I tried to help them get a handle on where their money was going, we discovered forgotten bank accounts and a self-directed IRA that Patty had opened while she was working for a mortgage company, intending to buy and sell stocks as investment for retirement. She had forgotten all about it.
My husband, a careful and precise record keeper was appalled, but I reminded him that most people don't know what financial records to keep and where to store them.
Let me give you a few tips on getting your financial records started, stored, and how to maintain them.
Financial records, like legal documents are important to be able to get to when you need them. My answer to everything administrative is to make a folder.
I am going to recommend something that we do in our home. Group your folders in sections based on temporary, annual, permanent, and dead storage.
Temporary folders will contain 6 month warranties, a short-term loan (3-9 months) from parents, coupons or rebates that will expire within 6 months. If you are making payments for tuition, you might have a Tuition Payment folder in your temporary file system.
Dead storage might be old tax returns (which the government can audit up to 7 years) and account statements from several years ago. You would not put the mortgage to your house in dead storage because folders in dead storage will eventually be thrown away when you don't need them.
Permanent folders are the ones you use day in and day out. Here are some folders you might want to fill in your brand new financial file system.
- Home appraisal
- Homeowner's insurance policy
- Home improvement receipts
- Mortgage papers
- Lease agreement, if renting
- Car titles
- Service record for each car
- Insurance policies for each car
- Owner's manuals and key codes
- Car loans and leases
- Service contracts
- Car warranties
- Mutual funds
- Life insurance policies
- Savings accounts and passbooks
- Bank statements and deposit slips
- Checking account statements, balanced
- Checking account statements, unbalanced
- Cancelled checks
- Certificates of Deposit
- Net worth statement
- Credit card contracts
- Loan contracts
- Credit card numbers and notification requirements
- List of all account numbers
- Inventory of household goods for insurance
- Appliances and equipment receipts, warranties, service charges, and manuals
- Heating and air-conditioning receipts, warranties, service charges, and manuals
- Military/Veteran information
- Social Security earnings
- Retirement/Sick leave
- Budget and expenditures
- Tax information for current year
- Paid receipts
- Wallet inventory
- Safety deposit box or home safe inventory
- Copy of will
- Valuable papers inventory
- Burial agreements and receipts
- Letters of last instructions
- Genealogy records
- Copy of other people's wills
If you are want to learn more about finances or teach economics and financial management to your high school teen, let me recommend Economics, Finances, & Business, a one-credit high school course using living books and hands-on projects. You can purchase Economics, Finances, & Business at Amazon. The E-book is available at PayHIp or Currclick.
Merey (Meredith Ludwig Curtis)