Record-keeping is similar to insurance. You hope you’ll never need an old piece of paper, but if you do, it can make a big difference if you can find it.
Not only do you need a system to keep track of where you put things, you also need to leave instructions including a records index so other people can locate your important papers. Now that so many people are using computers, print a hard copy and note the file names where all of the records are stored.
Since your records may be filed at home, in a safe deposit box, at work or somewhere else, it is good to have a cross-reference index so people know where to locate specific documents. For example, your investment records may be at home in a metal box, your savings bonds stored in a safe-deposit box and copies of your will may be in your office and in another safe location.
Attach to your records index an up-to-date list of all your important contacts including addresses and telephone numbers. This list might include an accountant, the administrator of your will, an attorney, banker, minister, doctor, employer, financial advisor, insurance agent and anyone else who should be contacted on your behalf.
Keeping track of documents and knowing which records should be kept and which ones you can pitch becomes a simple routine once you create a system. Here are some guidelines based on the categories used in a past column.
- Bills. After bills are paid each month, deduct them from your spending plan. Keep receipts as proof-of-purchase for products and file in the Products file. If problems pop up, you have adequate proof and they will be repaired with little or no cost. Check receipts against your credit-card bills. If you have documentation, you can successfully remove inaccurate charges on your bill. If you’re not sure what to discard, keep all paid bills until you do your taxes. Then pitch anything that you don’t need to prove a purchase, a warranty claim and/or support a tax deduction.
- Credit/loan record(s). Keep loan contracts until they are paid. If the contract is with an individual, you might want to keep the cancelled note indefinitely to prove to an estate that you paid the loan. Otherwise, pitch the paid-up contracts. It is a good idea to check your credit bureau reports once every year and correct any inaccurate information.
- Employment record(s). Keep pay stubs until tax time to check against the amount reported by your employer. Keep track of contributions made to retirement plans through your employer. Have a record of survivor benefits including life insurance and pension annuities. Keep copies of performance evaluations, promotions and salary adjustments.