Even the most organized people may find managing finances and documents a daunting task. Making sure your financial house is in order will save you time and money, make tax filing less stressful and ensure that your loved ones have access to vital financial documents in the case in the event of an emergency.
You must create an organized system to store your files, no matter if they are digital or physical. Start by gathering all of the documents you own in one location. Go through your kitchen counter or entryway table, your home office desk and car trunk, garage and any other place where papers collect. Discard junk mail catalogs, expired coupons and bill inserts. Keep receipts and product manuals for large purchases.
Sort your paper documents according to the category. Bank statements, for example can be organized by date, and then classified into folders according to the type of account (such as investment accounts or credit card accounts). The organization by category helps you locate what you’re looking for when you need it. If you have multiple accounts, such as “auto” or “home” you might want to consider creating subfolders. You can also sort your accounts by the year. This is particularly helpful in the event of audits and tax season.
Once you’ve separated your documents into years and then divided them into sections, you should go through old files and get rid of them in accordance with the legal guidelines for retention. Always back up your files to prevent losing vital data. If you’re sharing files with coworkers think about using document management software to centralize your entire process.
