Think about financial goals first. Before tackling the job of reorganizing your financial recordkeeping, think through your current financial objectives and what changes might give you better data and efficiency to achieve them. You might want a system that tracks spending, saving, budgeting and on-time debt payments. If you already have that system in place, you might want more detailed information on retirement or your child's college fund. Consider involving your financial and tax advisors in the discussion and see what suggestions they have.
Create a system that makes it easy for loved ones and financial professionals to help in an emergency. If something were to happen to you, could a loved one easily navigate your finances? When organizing, always keep your spouse, children and/or executor in mind. Consider creating an ICE file, short for "In Case of Emergency," and let your representatives see it in advance. On paper or on a computer document or spreadsheet, your ICE file should be a handy guide or index to find the following quickly:
Know what paper documents you need to keep or shred. Here are some general rules:
Estate documents and directives generally should be kept in their original paper form in a safe, accessible place with copies as advised. Other documents can be digitally scanned for printout as needed. Many all-in-one printers have a document-scanning feature and today, there are scanning apps available for smartphones as well.
Finally, no matter how you revise your recordkeeping, create a backup system. If you are wedded to paper documents, consider keeping copies at a secure offsite location or with a trusted friend or relative. If you've gone digital, external hard drives or cloud storage are possibilities. Above all, protect all password information and regularly check your credit reports throughout the year to monitor potential information breaches.
This article is intended to provide general information and should not be considered health, legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.