Getting your financial documents organized as the year ends

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By Delta Jones-Walker, Gary Crusader

Can you believe it? In less than 30 days, 2017 will be history. This is the time that many start to think about goals for closing out the old and starting out new. One of the easiest things you can do to help get your financial house in order for 2018 is to get organized. Having your financial information stored and processed in a systematic manner will go a long way in helping maintain your finances. Here are a few tips to get started:

Start a Basic Filing System

Over the course of a few years, one can accumulate a lot of records, receipts, etc. that can prove to be important should an emergency arise. This financial information needs to be organized and easily accessible when you need it. A simple filing system can make this less of a chore. Break down all of your financial papers into the following categories:

  • Bills due
  • Important documents to keep
  • Items to throw away or shred

It really is that simple. Either you have a bill that needs to be paid, a receipt or document that should be saved, or something that can be discarded. It is up to you how you organize these items, but it can be as simple as using three individual folders labeled with the above information. Once you have set up your filing system, whenever you get mail, email or obtain an important financial document, take a moment to place it in the correct folder. At least once a year, review the contents of each folder, continue to store the important documents and toss or recycle what you don’t need.

Keep Important Documents Organized

While the basic filing system is a great way to keep your daily finances in order, it’s a good idea to organize the important items you need to keep for extended periods of time. Some examples of financial documents you should keep include the following:

  • Tax returns
  • Insurance policies
  • Mortgage documents
  • Investment and retirement account statements
  • Warranties or service contracts

How Long to Keep Your Documents?

Since there is always a need to keep the aforementioned documents, the question then becomes how long should you actually keep them? Here are some common financial documents and the length of time you should consider keeping them:

Tax returns. It is recommended to keep tax returns for seven years. If the IRS wants to audit your returns, they generally have between 3-6 years to go back from the date you filed. Keeping seven years of past returns on hand will keep you covered and make your life a lot easier if you do get audited. Also, if you plan on buying a home you will need to show proof of income to a lender, so it’s nice to have at least a few years’ worth of data at your fingertips.

Mortgage documents. It is recommended to keep mortgage documents indefinitely. You may need to refer to them in the future for a loan, and they could provide some valuable information whenever you decide to refinance or sell your home.

Bank and investment account statements. One good thing about the internet is that you can often pull up electronic copies of your bank and investment account statements online. This eliminates the need to keep every single statement you receive. Still, it’s a good idea to review each paper statement you receive and if they are quarterly, keep them until the next statement arrives. Once you receive the year-end or annual statement, you can safely toss all the monthly or quarterly statements. This will cut down on the amount of paper you have to file away and you can always obtain additional copies online or by calling your financial institution.

Bills and receipts. As you receive utility and credit card bills, it’s a good idea to keep these for a year while checking to make sure the information is accurate. Mistakes can happen and if you have a copy of your statement readily available, it can make it easier to dispute an error. The same thing goes for receipts. Keep them long enough to compare with your bank statements, so you can catch any errors. In the case of receipts being used for tax purposes, keep those receipts for up to seven years in the event of a tax audit.

Now that you have some filing to do, time to get started! Next month we’ll continue this discussion and explore protection from identity theft.

Connect with Delta Jones-Walker and Atled Financial on Facebook, Twitter: @Atled_Financial and LinkedIn! To schedule a complimentary consultation or a presentation to your group or organization, call 219-513-3710 or email djwalker@atledfinancial-.com and mention this column. Topic ideas for this column are welcome!

*Securities and advisory services offered through Woodbury Financial Services, Inc., member FINRA/ SIPC. Insurance services offered through Atled Financial Group 717 B Main Street Schererville, IN 46375 which is not affiliated with Woodbury Financial.

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