Organize Your Home Filing System
A system for personal records is a necessity. No matter how modest your home facilities might be, you need a special place to keep your papers. That could be as elaborate as a room or home office or as simple as a corner of the kitchen, bedroom, or hall.
Records, regardless of the filing system used, should be reviewed at least once a year to discard items no longer needed. January is a good time for an overhaul, since it’s just before you begin to work on taxes.
The equipment you will need doesn’t have to be elaborate. Think about a filing cabinet before you think about a desk. The two-drawer type can be covered with paint or wallpaper. A wooden slab or hollow-core door stretched across the top of two cabinets can make a practical home office desk.
If you don’t have space for a small cabinet, buy accordion folders, a storage chest that fits under the bed, or get sturdy cardboard boxes of an appropriate size. A home computer or portable typewriter and a pocket calculator can be handy, but they are not essential. The essential thing is to know where everything is.
Two Home Files
You should keep two home files, in addition to your safe deposit box at the bank. These two files are your active file and your dead storage file.
Your Active File
1) unpaid bills until paid,
2) paid bill receipts,
3) current bank statements,
4) current cancelled checks,
5) income tax working papers.
After 3 years, move these items to your dead storage file. This is the minimum time period to store records. I recommend 7 years. Some paperwork needs to be saved longer. This includes papers related to your home and investments owned over many years. Keep all paperwork during the life of your investment and for 7 years after you report its sale on your tax return.
Other Items for Your Active File
There are other items which should always be kept in your active file. These include:
1) employment records, such as resumes, recommendation letters, health benefit information;
2) credit card information, including the number of each card, by company name;
3) insurance policies;
4) copies of wills;
5) family health records;
6) appliance manuals and warranties;
7) education information, such as transcripts, diplomas, etc.
8 )Social Security information on benefits and regulations; and
9) an inventory of what’s in your safe deposit box (you might store a key in the inventory folder).
Finally, keep a record book of the whereabouts of your important papers. If you use a loose-leaf binder, you will be able to change papers easily or copy a page or two. The book should contain a list of all your savings and checking accounts. This way you won’t become one of the missing depositors who have forgotten their accounts or who have died without telling relatives about them. Also, include the name and branch of the bank where you keep your safe deposit box.
The book also should have all of the family members’ social security numbers, and all of the insurance policy information. It’s a good idea to keep a copy of your household inventory here as well. Don’t forget to record all your household improvements.
Finally, make sure someone else knows and understands the family record-keeping system
THINGS TO REMEMBER
Use the checklist chart below to remind yourself what to keep and what you can discard.
Safe Deposit Box
1. Birth Certificates
2. Citizenship Papers
3. Marriage Certificates
4. Adoption Papers
5. Divorce Decrees
7. Death Certificates
9. Titles to Automobiles
10. Household Inventory
11. Veteran’s Papers
12. Bonds and Stock Certificates
13. Important Contracts
1. Tax Receipts
2. Unpaid Bills
3. Paid Bill Receipts
4. Current Bank Statements
5. Current Cancelled Checks
6. Income Tax Working Papers
7. Employment Records
8. Health Benefit Information
9. Credit Card Information
10. Insurance Policies
11. Copies of Wills
12. Family Health Records
13. Appliance Manuals and Warranties
14. Receipts of Items Under Warranty
15. Education Information
16. Inventory of Safe Deposit Box (and key)
17. Loan Statements
18. Loan Payment Books
19. Receipts of Expensive Items Not Yet Paid For
All Active File Papers Over 7 Years Old
Items To Discard
1. Salary Statements (after checking on W-2 Form)
2. Cancelled Checks for Cash or Nondeductible Expenses
3. Expired Warranties
4. Coupons After Expiration Date
5. Other Records No Longer Needed
Categories: Personal Finance