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     Get Your Financial House In Order

As life grows more urgent and fast-paced, we need to step back for a moment and make sure that our finances and important DOCUMENTS are in order. In the event of an emergency, natural disaster or other catastrophe, having your financial house in order can make a difficult situation more bearable. Plus, you will feel much more at ease now, knowing that should something happen to you or a loved one, all the necessary documents can be QUICKLY found in a moment’s notice.

The importance of keeping good financial records cannot be over-estimated as the failure to do so can have NEGATIVE implications in our lives. Keeping good financial records can help you:
  • pay bills on time
  • keep a good CREDIT rating
  • avoid late fees and PENALTIES
  • file income tax on time
  • avoid and dispute credit card and bank statement ERRORS
  • file insurance CLAIMS in a timely manner
  • apply for retirement or disability BENEFITS
  • preserve peace and harmony for you and your family
  • prove citizenship, custody, marriage, birth, death, divorce
  • prove OWNERSHIP of assets

To hit the road running with a well oiled bill paying system start at the mailbox or your first CONTACT with the mail:
  • as soon as you touch the mail, put all bills to be paid in their designated PLACE -- a basket or file

  • pay bills TWICE a month, then FILE paid bills by month, category or company -- oaying bills once a month often creates late fees, unnecessary finance charges and potentially blemished credit rating

  • apply for ONLINE banking –- it’s free at most banks and can make your life easier and save you time all in one click

  • consider using a money management SOFTWARE like Quicken or Money to better track your income, expenses, liabilities and assets

  • sign up to begin receiving salary, retirement benefits and dividends ELECTRONICALLY -- electronic deposits are safe, the funds are available immediately and you eliminate the risk of lost or stolen checks

  • RECONCILE your bank statements monthly and contact your bank immediately if you find any discrepancies in your account

You should keep four basic sets of records:
  • documents you CARRY with you -- driver’s license, identification, vehicle registration, and insurance card

  • CURRENT records -- unpaid bills and current bank statements that you store in an active file for easy access

  • LONG-TERM records -- closing statements that are no longer current but need to be kept in a file at home

  • SAFE DEPOSIT box records -- deeds and other original records that are important but seldom needed

Keeping family records in a business-like manner saves time, trouble, money and frustration. Here are some SUGGESTIONS -- what records you should keep, how you should keep them, and for how long. "Duration of ownership" means to keep the papers as long as you HAVE the account or asset, possibly longer if they are needed for TAX purposes (usually up to 6 years):
  • INVESTMENTS, stocks, bonds, and other securities -- safe deposit box -- duration of ownership

  • BANK statements -- home file -- duration of ownership

  • non-deductible canceled CHECKS -- home file -- 3 years

  • SAVINGS certificates and certificates of deposit-- safe deposit box -- duration of ownership

  • credit card and LOAN statements -- home file -- duration of account or obligation

  • INSURANCE policies and records of claims -- home file -- permanently

  • copies of past tax RETURNS -- home file -- 6 years minimum

  • records of DEDUCTIBLE expenses, income, and tax payments -- home file (current) and then fireproof home storage after filing of taxes -- 6 years minimum

There are a number of types of important documents you need to make sure you keep in your PERMANENT files in a safe deposit box:
  • WILL -- to ensure that your property will be distributed according to your wishes

  • living will and powers of ATTORNEY -- to ensure that you are taken care of in the event you become unable to take care of yourself

  • EMPLOYMENT -- proof of benefits for current and former employers...including pension, profit sharing, insurance, and any deferred compensation (with human resources department contact information)

  • BUSINESS -- list of all business agreements, the structure and names of all businesses, and contacts for all partners

  • FAMILY -- list of all family members and their contact information...also any documents relating to marriage, divorce, adoption, immigration, naturalization, death, etc.

  • FINANCIAL -- list of all account numbers with contact info for each, contact information for all financial advisors, final loan payment documentation

  • ASSOCIATIONS -- list of all memberships and the main contact person

  • COMPUTER-- all important web usernames and passwords

To help you avoid “document overload,” here is a list of items that you can begin DESTROYING today -- however, any item that is used for tax purposes (such as for charitable contributions and business expenses) should be kept for at least three years (six if you own a business):
  • destroy "purchase or convenience" CHECKS that are attached to your credit card statements if you aren't using them immediately

  • BANK records such as ATM receipts, canceled checks, and credit card receipts can usually be destroyed after you've made sure the information is correct on your monthly statement

  • most people can also throw away UTILITY receipts once the bills are paid -- but hang onto them if you're deducting charges as home office expenses, if you want to keep a year's worth of utility expenses to show a prospective home buyer how much your utilities typically cost, or if you need them to prove residence

Here are some additional items that you can begin getting rid of immediately:
  • appliance and software MANUALS for items you no longer own
  • catalogs and magazines
  • charity and credit card SOLICITATIONS
  • checkbooks for accounts that have been CLOSED 3+ years
  • EXPIRED membership cards, credit cards, and coupons
  • junk mail and "envelope stuffers"
  • business CARDS that you have collected but never used
  • old letters and cards with no SENTIMENTAL value
  • old newspaper or magazine clippings
  • old RECEIPTS (that are not for large purchases)
  • old school papers
  • OUTDATED calendars, phone lists, and to-do lists
  • papers from an old JOB that are no longer relevant
  • RECIPES you no longer need or use
  • travel brochures and maps that are outdated
  • text books from college

At the end of the required retention period, financial records may be disposed of unless they support current audit or litigation. When destroying documents it is now a good idea to use a SHREDDER to prevent identity theft -- particularly when you are disposing of any receipts that have your credit card numbers or other PERSONAL information on them.


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