5 Tips to Organize Your Financial Records Once and For All


NEW YORK (MainStreet) – If you're like most people, you receive bills, bank statements and other financial documents almost daily, either via email or snail mail. In fact, these days you might be getting that data right on your smartphone or tablet device.

Once you've opened them and got the information that you need, where do they end up? Stuffed in a desk drawer, tucked away in your email archive or stored on a website that you’ve already forgotten the username and password to?

The problem is, you know at least some of this stuff is important, but there must be a better way to deal with it all.

The good news is that dealing with all of your paperwork, either online or off, isn't (or doesn’t have to be) rocket science. Just a few simple steps and a little bit of time will help you determine what to file, what to trash, and what to keep right at your fingertips. No matter the date, it's always a good time to exercise some “spring cleaning” on your financial life.

Here are five easy tips for organizing your financial records for better peace of mind, and even better savings.

Reduce Paperwork

It's easy to feel overwhelmed by the sheer amount of paperwork and email messages we receive, from mortgage statements and phone bills to gas station receipts. Your first step is to figure out which you need to keep, and which can be shredded.

A good rule of thumb is that any of your “regular” or monthly bills that have no bearing on your taxes (store receipts, phone, cable or utility bills, ATM statements and deposit slips) can be discarded once you've entered them into your checkbook register, budget spreadsheet or other recordkeeping method. To help, Mint.com has a good – and free – online document management tool for its users.

Keep Important Documents Safe

If you value a physical document, keep your important, long-term personal records and financial information in a place that's safe and easy to access – a filing cabinet or fireproof safe is ideal.

These critical records include: wills, passports, marriage and birth certificates, Social Security cards, tax returns and W2 information (at least five years’ worth of records), mortgage loan information, receipts for tax-deductible items such as charitable donations, receipts and warranty information for appliances or other large purchases, 401(k), IRA, or other investment statements, and credit card agreements. Note that for some key documents like passports and marriage licenses, only an original will satisfy the authorities, so don’t count on printouts or copies to get the job done.

Track Your Spending

Now that you've got your key financial information in one place, it's a great time to examine your spending and saving habits. Where does your money go each month? Track your weekly or monthly spending, starting with the necessities such as rent/mortgage, groceries, household utilities, credit card payments, and student loans – and then see how much you spend on non-essentials. You're almost certain to find areas in which you could cut back and save more.

Or, if it looks like your finances are right on track, you may have money left over that can be directed toward a high-interest savings account, or to reduce your debt. Use some good online savings tools like BankingMyWay’s Savings Goal Calculator http://www.bankingmyway.com/calculators/savings/savings-goal  to get on the right path.

Scan Important Documents

For additional safe-keeping of sensitive physical documents, create electronic backups by scanning certain critical documents like wills, birth certificates or car titles, either on your own scanner or at the local copy/print shop.

Pay Your Bills Online

To further reduce paperwork, consider setting up automatic electronic payments from your bank account. When it comes to things like rent or mortgage payments, or any bills which tend to be in regular amounts, paying online or with your smartphone can not only save you the hassle of dealing with checkbooks and stamps, but it helps keep your payments consistent and timely. Just make sure you tell your creditor to email you a receipt, or post one on your account details page.

Once you have a system in place, it gets much easier to stay on top of your finances and the records of those finances, and to make any necessary adjustments to your budget as the need arises or as your situation evolves.

Plus, there’s a bonus: You might even get a better credit rating and a fatter savings account out of the deal, too.

Getting organized is an important step in getting on top of your finances, but so is getting educated. Check out MainStreet's 10 Things You Might Not Know About Your Money and get started!

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