FINANCIAL RECORD-KEEPING ESSENTIALS

Keeping good financial records is an essential part of an organized, chaos-free life. In fact, financial experts and professional organizers agree that setting up a simple system for opening mail, processing bills and filing vital papers allows you to save money and time and better plan for your financial future.

If anyone you know thinks that organizing financial paperwork is too time-consuming to yield any important results, they couldn’t be more wrong. Be a hero and share these details. In fact, if you organize your financial records, the benefit can be like winning the lottery. You will be able to:

• Pay bills on time and in the correct amounts
• Avoid late fees, high interest rates and penalties
• Prevent checks from bouncing or credit card limits from being exceeded
• Avoid or dispute errors on bank, loan, credit card, investment statements and store purchases
• File tax returns and quarterly payments on time and in the right amounts, avoiding penalties
• Take all possible tax deductions for your home, family or business
• Submit insurance claims for complete and timely reimbursement
• Get rebates and discounts on purchases before the deadlines arrive
• Prevent and/or recover from identity theft, preserving your good credit rating
• Prove ownership of personal or business assets
• Maintain an accurate picture of your net worth upon which to base sound financial decisions
• Preserve your sanity, your identity, your dignity and your future!

You can reap all of these benefits with a minimal investment of time and effort. Set up or revise your record-keeping system, whether you keep your financial records in ordered files or stacked under the wobbly leg of a table, to see what you can do now to ensure your financial success:

Open mail every day. Debt can certainly cause anxiety if it gets out of control, but ignoring your financial situation won’t make your troubles go away. Get a handle on your current finances by opening every envelope and reviewing statements for accuracy. Be sure to check every line against your receipts. If everything looks fine, shred any receipts you won’t need for tax purposes, returns or proof of ownership.

Place bills, in order of due date in your bill-paying center, where you maintain an ample supply of stamps, envelopes, address labels and a calculator. It doesn’t matter whether you use personalized checks at a color coordinated, interior decorator-approved correspondence desk or have a designated plastic in-box on a folding bridge table. But commit yourself to deciding you will pay bills on time (using a Tickler File, if necessary) and reconcile (that is, balance) your checkbook regularly!

Record the essential information regarding how you paid a bill. Be sure to note the date, check or transaction number, and amount of payment. If you lack space in your checkbook register for all of the details or don’t use a computerized system, write this complete information on your statement before you file it away.

Maintain a file folder or three-ring notebook for every bank, credit and investment account, insurance policy or other financial benefit or obligation and keep all your financial records together. A sheaf of papers on top of the microwave or a pile of statements under the bed does not fulfill the requirements of a good filing system!

File and maintain your papers according to a records retention schedule. For personal and family finances, it’s not necessary to keep household utility bills for more than a year unless you are taking a home office deduction, but you’ll want to maintain this year’s records of charitable donations and medical expenses until you’ve filed your income taxes next April. For businesses, there are Federal and state standards for maintaining employee records, but the legally-required retention time for other records can vary by industry. If you have questions about how long to keep something, check with your accountant, tax attorney or professional organizer.

Shred convenience checks and any papers bearing your Social Security, credit card or personal account numbers, and any health records you don’t intend to maintain. Identity theft is on the rise, and dumpster diving is still the main source of personal information for identity thieves. If it’s not a matter of public record or can’t be found in the telephone book, shred it!

Remember, the best thing you can do now to preserve your future (including your financial health, identity, dignity and sanity) is to build an impenetrable shield around your paper and plastic–your financial record-keeping system!

Copyright © 2005 Julie Bestry and Best Results Organizing. All rights reserved.

About the Author:   Julie Bestry is a professional organizer, speaker and author, who helps individuals and businesses save time and money, reduce stress and increase productivity through new organizational skills and systems. Her most recent book is 57 Secrets for Organizing Your Small Business. For information on how Julie can turn your chaos into serenity, visit Best Results Organizing at http://www.juliebestry.com.

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