Organize Your Financial Records

Keeping organized financial records is very important but most of us don’t consider it we need to retrieve information, usually at the last minute. Retaining your financial data while having easy access to it is invaluable when preparing your taxes, applying for loans, and monitoring your financial health.

If you’re not organized, you’ve doubled your workload. For example, tax time arrives and you’ve got two tasks: 1. Gather your data and 2. Complete the required forms (or relay your information to a tax professional). If you have to scramble for your documents you are most likely starting the project feeling frustrated and irritated. Eliminate the first step and see the tremendous savings in the amount of time it takes to complete your financial task. Pull out organized records and start off positively. And being organized just feels great.

Fortunately, your bank and credit card statements contain the majority of your financial history. These statements capture transaction dates, amount, and name of the person ro vendor you paid. But most of us have more than one bank account and keeping up with the paper statements can be a hassle.

Here’s a guide to help gather all your statements in a useful way.

First, gather all your bank statements, year-to-date. (Don’t forget your investment and retirement accounts.) Retrieve your statements and open the envelopes. If you bank on-line, print a copy of your statements. It’s a good idea to keep hard copies of your financial transactions for emergencies.

Clear a work space and turn on your favorite music. If you’re getting stressed, slower tempo music may help soothe you. Relax and remember today is about getting organized”not reviewing the numbers!

Start sorting! Separate your statements into stacks”one for each account. Take note of how many accounts you have.

Now for my favorite tool…I call them “expandy files.” The one I use most frequently has six sections and prongs on the dividers. It’s not uncommon for some of my clients to have 12 or more accounts. So we use several of these folders. Head to your nearest office supply store and get enough for all your accounts to have one section. While you’re there, pick up a two-hole punch if you don’t have one.

Assign each account its own section and label it. I usually put my main checking account first and continue until I end with my account with fewest transactions. You could sort alphabetically, order of when you opened each account, or by financial institution. However you like. Two-hole punch your statements. And put them in the prongs with the oldest bank statement on the bottom”most current on top. Keep stacking them in their appropriate sections until you’re done.

When your next statements arrive, open them up and file them away. The sooner you file your statements this the less likely they are to get misplaced. At the end of the year your statements will be organized and ready to file with your archive records.

I’ve seen many systems and the ones that work best are simple and easy. Remember, there is no right or wrong way of keeping these types of records. Modify this system to fit your needs. Try taking it one step further and color coordinate your files by year. Impress your friends and family with your neatly organized records using this effective solution!