Financial Zip

Now more than ever needs to be a good time to get your financial statements in order. It not fun in fact it can be a lot like pulling weeds. You get into it and you realize that you are into it pretty deep. But just like weeding at the end of the day the garden looks great and so will your financial record keeping.

Take a Week

Sometimes this is a pretty involved process and the best thing to do is to take it in small steps so I would plan a financial week where you update all your financial information and if there are old records to take the time to get rid of them.

Net Worth

This is a big one and one that I recommend updating every quarter. You can download lots of different forms from excel and other websites that you can use to fill it out. Net Worth is the best measurement for your financial health. Filling it our will be the biggest boost to know what you need to do to boost it.

Cash Flow Statements

Just as important as your net worth is know what is coming in and going out. If you don’t already start a spending journal its as easy as writing down your purchases in a notebook or using Microsoft Money, Quicken or other accounting software. Some banks even track your spending if you use a debit card.

Get Organized

I just did this and it is a lot of work but it feels really good to have it done. What I did was to get 3 ring binders and divide them up into these categories. The thing I like about binders as opposed to hanging folder is I can 3 hole punch it and organize it with dividers by year or category.

Tax Returns. In this binder put your tax returns’ for the last 7 years include any w-2’s and other forms that are required for you taxes.

Financial Information. I divide this up into 3 category’s; Bank info, credit card info and statements and retirement and investment accounts. Now if you wan to make a binder or folder out of the 3 category’s that is fine.

Health, Dental, and Life Insurance. Put all your insurance information into this binder this includes your current plan information, any bills or statements sent to you and ant updates that you insurance company sends you.

Consumer Information. In this binder I include utility bills, purchases and work done on your automobile, and any warranties that are relevant to your current purchases. If you have important computer or electronic information include it here as well.

Auto and home owner documentation. This is all your automobile coverage and your home owner information.

Loans. Any loans that you have outstanding put in this binder.

Legal Documents. This will include any wills or trusts that you have that have any type of documentation.

Personal and Child documents. I have a personal folder and so does my wife and we created one for our kids. I usually put things or documents in this that are relevant to me or past things that I want to keep.

Every Quarter

If you can clean your financial house or get it straight every 3 months it really allows you to know where you stand plus get rid of any out of date documents thus decreasing any clutter that you don’t need. Here is a good list of things you can keep and get rid of:

Keepers:
• Your will, living will and durable power of attorney.
• Life insurance policies, including policies with your employer.
• Insurance, and any death benefits that are due you as a veteran of the armed services.
• Retirement plan documents from your pension, profit sharing, 401(k), and IRAs, along with annual statements.
• Records of nondeductible contributions made to your employer-sponsored retirement savings plan or IRA.
• Separation and divorce documents.
• Real estate deeds, titles and property surveys.
• Military records.
• Tax returns and supporting data for at least the last seven years after the original return is filed.
• For investments, keep buy/sell trade confirmations to show when each security was bought and sold, the price you paid and commission charged.
• Dividend reinvesting statements (for seven years after you file your tax return showing a gain or loss( Receipts for major purchases like jewelry, furniture, etc.
• Receipts for items under warranty until the warranty expires.
• Pay stubs – until the end of the year when you compare the year end totals with the amounts shown on the W2 form you get from your employer.
Tossers:
• Receipts of bank deposits and ATM transactions – once you receive your bank statement and verify that the transactions were properly posted to your account.
• Canceled checks – save only those needed as support for tax purposes.
• Bills – once you’ve paid them and verified that the checks have been cashed. I usually keep mine for at least 1 year.
• Monthly or quarterly brokerage statements – if your annual yearend statement summarizes all transactions made during the year.
• Credit checks on employees (even housekeepers and nannies) – in accordance with Fair and Accurate Credit Transactions Act






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