Bridges’ Simple, 4-Step Plan For Organizing Your Financial Records

The events in Charleston last week have left all of us — once again — searching for answers to what feels like a festering wound simmering under the surface of our culture.

But the grace notes we have seen coming from the hearts and mouths of survivors and family members of the victims might, perhaps, show all of us a way towards healing. Forgiveness, rather than offense (even when offense is completely justified), is truly a much stronger force.

In the meantime, let’s take notes on what those brave family members are doing.

Now … well, we’re almost to the end of June, which feels a little crazy to me. But here we are.

These months provide a different rhythm (especially for those who have young children in the home!), and in my opinion, it’s a great time to get organized in a way that you perhaps haven’t been in the past.

It’s amazing to me how many families and households don’t have a workable plan when it comes to handling the flow of paperwork that comes through their mailbox, and for tracking their online world.

In fact, the cloud-based nature of so many financial statements can lead us all into a bit of a lull: “Everything is online, so I can just throw away the paper statements”, or “If I really need something, I can always request a copy.”

And so people have begun letting their household filing system go to the dogs.

The problem with that is …

1) It’s actually not the case that everything can be available online — many statements are only kept a short amount of time “in the cloud”, and unless you are scanning them yourself, you often have to pay fees to retrieve older items.

and

2) Throwing away documents and trusting everything to “the cloud” can leave you vulnerable to ID theft (especially when you don’t employ a shredder!).

So, I’ve put together something that will (hopefully) provide you a simple plan, and perhaps a tiny little kick in the behind to get this into place.

Bridges’ Simple, 4-Step Plan For Organizing Your Financial Records
“You will never win if you never begin.” – Robert Schuller

When we’re privileged enough to have conversations with clients unrelated to estate planning, and more about their general financial world, we’re often asked about setting up a good system for keeping it all organized. Often, one of the major problems for many families is simply keeping track of everything! So here’s what we suggest…

1. Find a good home for your documents.
The best spot to set up a home financial center is where you find the bills and receipts generally piling up–even if it’s in the corner of your kitchen. If you don’t want your financial records on your kitchen countertop, store them away in a corner filing cabinet nearby. Better to use a space you usually go to than to try to form a habit of going to the upstairs study you visit only once a week.

2. Determine what you need to keep and what you can throw away.
Generally, you can get rid of grocery receipts, credit card slips for non-tax-deductible items, and ATM receipts you’ve already reconciled. Toss all your junk mail. You should hold on to receipts for anything that’s tax deductible, as well as medical expenses, past tax returns, and records of charitable contributions. Also keep insurance policies, investment purchase records, mortgage and property bills, and warranties and instructions.

3. Sort your papers.
Use four categories: bills, insurance policies and records, bank and brokerage statements, and other important documents. Then sort those papers into separate folders for each account, type of receipt (like transportation expenses or medical bills), insurance policies, etc. Toss the papers that don’t fit into any category.

4. Spend five to 10 minutes a day maintaining your files (or 30 minutes per week).
Open your mail near the trash bin. Circle the due date for your bills and file them in the proper order. Then save whatever you decide to keep in its proper folder.

I hope this helps.

Until next week then, I am warmly yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA