Sorting your financial papers
By
Diana McLaren • Bankrate.com
Ibbott calls this a "mirror image" system and she recommends it to clients. Some of the sorting categories she suggests are: credit card and service agreements, operating manuals, home repairs, utilities and receipts for major purchases.
Once you've got things organized and in the right place, you need to do a thorough check at least once a year, purging outdated or unnecessary paperwork in your files.
Mortgage and insurance documents, plus original investment certificates, represent a special category and should be kept in a safety deposit box at the bank or a fireproof locked box at home. Keep both an electronic and a paper record of what's stored where. Where insurance is concerned, documents should include appraisals, receipts and photographs, along with your complete detailed policy. Your annual insurance statement should be kept with the current year's paperwork.
Any major asset you might some day sell, such as a car or house, should have a file with receipts for major upgrades or repairs. You can present this to a potential buyer to assure them the roof is nearly new and guaranteed for 10 years, or the car just had a new transmission installed. Property assessments for tax purposes and relevant documents should be kept as long as you own the house or condo.
Paper diet
Getting control of your paperwork in what was once thought would be a paperless world is such a pervasive problem that it was the tip of the day recently on organizing guru Peter Walsh's website. Walsh gives step-by-step instructions to "conquer those piles once and for all." He suggests dealing with new papers first, "no matter how high the old piles are." You need to make an immediate decision about each and every paper, and then act on that decision -- sign it, send it, scan it, file it, recycle it, etc.
Don't forget to shred before you take any personal information to the curb on recycling day.
Where nonbusiness financial paperwork is concerned, Walsh's advice aims to put you on a paper diet. He recommends getting rid of credit card and other bank receipts monthly once you've checked and verified them against your statement. He advises the same for minor purchase receipts "unless there is a warranty or refund involved."
His annual purge includes monthly bank and credit card statements and individual pay stubs. And while he recommends getting rid of tax-deductible receipts after the necessary seven years, he favours keeping the actual returns and notices of assessment indefinitely.
Ibbott says that in working with clients, she's amazed at the distance between what they say and what they do. "I had one client who came to me saying, 'I want to get more organized.' Then she told me she had already worked with several of the most respected local professional organizers. She didn't want a consultant, she wanted a housekeeper."
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