Oldies But Goodies

We dusted off two of our most popular blogs in honor of spring cleaning and tax season.

Key Takeaways

  • Having a system you trust to find all of your key records, quickly and easily is just as important as deciding which records to retain. Remember, you run the system; the system doesn’t run you.
  • After gathering all of your important papers, divide them into 3 piles: an active file, dead storage, and items to discard. Do a little bit at a time—don’t get overwhelmed.
  • Home files should include frequently referred to bills, warranties, bank statements, etc. You’ll also need a secondary storage location for your more important, difficult to replace papers–passports, vehicle titles, birth certificates, etc.
  • We strongly recommend investing in a scanner, external hard drive and online backup service—most are reliable, inexpensive and deliver significant peace of mind.

 

Managing Household Records

From paralyzing piles to functioning files: 3 keys to success

Originally published by Mark Rioboli on May 14, 2013 in Investment ManagementWealth PreservationWealth Protection

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Spring cleaning and tax season come every year, and with them come questions about what to keep and what to throw away:.

  • How long do I need to keep my tax returns?
  • How about my receipts?
  • How about brokerage trade confirmations?

Having a system to find all of these records, quickly and easily is just as important as deciding which records to retain, so let’s start there.

After gathering all of your important papers, divide them into 3 piles:

  1. An active file,
  2. Dead storage, and
  3. Items to discard.

The active file should include documents and financial records you deal with on a regular basis and which you refer to often. Keep them readily accessible at home.

1. Active File

  • Appliance manuals, warranties and service contracts
  • Bank statements
  • Bill payment receipts
  • Bills awaiting payment
  • Credit card information
  • Education records, diploma, transcripts, etc.
  • Employment records
  • Family health records, including vaccination histories
  • Health benefit information
  • Household inventory
  • Income tax working papers
  • Insurance policies
  • Loan statements and payment books
  • Password list
  • Receipts for items under warranty
  • Safe deposit box inventory (and key)
  • Tax receipts, such as those received for charitable deductions

2. Dead Storage

All active file papers over three years old are considered dead storage. This may not necessarily apply to everything.  For example, appliance manuals that you use frequently should stay in the active file. See the accompanying chart at the end of the post for more details.

3. Items to Discard

Always use a shredder to discard any materials containing your personal information.

  • Canceled checks for cash or non-deductible expenses
  • Expired warranties
  • Pay stubs, after reconciling with W–2

More Detailed Chart

Below is a chart showing you how long you should keep specific documents. You can download the chart as a PDF as well to print out and keep.

- See more at: Blog Post – Managing Household Records

 

Managing Household Records: Create Your Filing System

Originally published by Mark Rioboli on May 16, 2013 in Investment ManagementWealth PreservationWealth Protection

In the previous post about managing household records, we talked about which files you should actively keep, which files you should keep in storage, and which files you should discard. Here we discuss how to create a filing system you trust so that you know where all of your important documents are located—and accessible at a moment’s notice if necessary

Create Your Filing System

Generally, your home file should include all the items you refer to frequently, including bills, warranties, bank statements, and more. You’ll also need a secondary storage location for your more important, difficult to replace papers, such as passports, vehicle titles, birth certificates, etc.  A fireproof/waterproof safe may be one possibility, but it’s better to store those records in a location away from home, such as a bank safe deposit box.

Consider scanning and storing some documents electronically. You want to save your important documents and files in a way that can easily be carried away and accessed later. Scanning will give you easy access to your documents and allow you to transfer them via e-mail and easily make back-up copies. Investing in an external hard drive for your computer and regularly backing up important documents will allow you to carry away the external hard drive at a moment’s notice.  Online backup systems such as Carbonite, Mozy and CrashPlan are very cost effective and convenient way to automatically backup all of your important files and have them available from anywhere via an online vault.

Safe Deposit Box

Once you have organized your documents, you’ll want to consider getting an off-site storage location, such as a safe deposit box. Use the safe deposit box for originals, but remember, you’ll still need copies at home if something tragic should happen to you and your safe deposit box gets sealed. Always seal documents stored in a safe deposit box in airtight waterproof containers (like Ziploc bags) to ensure they don’t get damaged. If you’d rather keep your records at home, then get a fireproof/waterproof safe. A good rule of thumb is to put documents in the box if you can’t easily replace them or if you don’t know what might happen if you don’t have them.

If applicable, you should have official or certified copies of documents for your safe deposit box. “Official” means an original copy with all required signatures. Selected documents, such as birth certificates, must also be certified or notarized to be considered valid. You can get most of your government records for free or at low cost from a government office. If you are unsure whether you need a certified copy of an important document, or if  you want more information about which local government office can give you originals of certain documents, then contact your local consumer protection office. Always consult your attorney before you put an original copy of your will in a safe deposit box—some states won’t permit access to the decedent’s safe deposit box unless all the probate instructions are in order.

Consider keeping copies of the following documents in a safe deposit box or locked in a fireproof/waterproof safe in your home:

  • Adoption papers
  • Advance directives*
  • Birth and death certificates
  • Citizenship papers
  • Contracts of importance
  • Deeds and property titles
  • Household inventory
  • Life insurance policies
  • Marriage licenses and divorce decrees
  • Military discharge papers
  • Passports
  • Powers of attorney*
  • Social Security cards
  • Stock and bond certificates
  • Wills*

*Since the safe deposit box will be sealed at your death, keep a copy of your will somewhere accessible. The same goes for the advance directive and powers of attorney since you may not be able to give others access to the safe deposit box.

What Documents Should You Have Ready?

Store the documents in an accordion file and keep it in your emergency supply kit so that everything you need is together. Items you should put in the kit include originals or copies of:

  • Birth and marriage certificates, divorce decrees
  • Social Security cards of household members
  • Driver’s license and other wallet cards
  • Will and/or trust documents; powers of attorney
  • Recent income tax return
  • Passports and/or other identity documents
  • Military discharge papers
  • A list of your prescriptions: name of medication, dosage, pharmacy

Other important papers include:

  • Contacts for family members, employer, financial advisors, attorney, accountant, and banker
  • Insurance policy information
  • Bank, credit union, and credit card account list
  • Summary of personal, financial, property, and other vital information

Other items to consider including:

  • Safe deposit box keys and/or safe combination
  • Computer user names and passwords; CD with relevant personal, financial, legal files
  • Some emergency cash

Remember that these documents contain personal information like social security numbers and bank account information that could be used against you if it fell into the wrong hands. Be sure your emergency financial records kit is stored in a secure location in your home so it is easy for you to carry away in a disaster, but not easy for a thief to carry away in a robbery.

Conclusion

While gathering and sorting all of this paperwork may seem like a great deal of work, consider working on your project gradually over time.  Also, taking care of this work now will save you a tremendous amount of time and money if catastrophe hits.

- See more at: Blog Post – Create Your Filing System

 

About Mark Rioboli

Mark A. Rioboli, CFP®, CFS is Director of Wealth Management for Independence Advisors, bringing over 25 years of experience in the wealth management industry. Have a question for Mark? CLICK HERE TO ASK MARK

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