by Peter Kenny
http://www.thriftyscot.com
©
2008
One of the most popular New Year's resolutions is
to get organized. Yet, a few days after those resolutions are made, most people
decide to move on to something else. For many people, getting organized is like
taking a cold shower in that it is best done only when it has to be done. But
getting your banking papers and other financials in order does not have to be
torture.
The best reason for getting your banking papers
and other financials in order is because you need to know what information is
on those documents in order to have the best sense of where you are financially.
From balancing your checkbook to keeping tabs on your money market accounts, information
and organization are the keys to success.
If it has been
a while since you last organized your financials, take a deep breath and tell
yourself that you are going to do this and then give yourself a good amount of
time to get it done. Do not try to do it all in one day, as that often leads to
mistakes and frustration. If need be, give yourself an entire month to get the
task done. Just make sure you commit enough time during each week of that month
to get some work done on it.
When it comes time to gather
up your documents, use this list as a guide to help you get started.
Gathering
up statements and other important information concerning checking and savings
accounts should be your first task.
The next step is to
find all the information on your retirement accounts. This might include your
IRAs, Roth IRAs and 401(k) statements. While you are doing this task, you can
also find and organize your non-retirement accounts. These are the various papers
that pertain to other types of investments that you may have. This might include
such things as money market funds, CD's, money market accounts, etc.
Another
particularly useful task to do while organizing your banking papers is to locate
all of your loan documents. These would include mortgage papers, auto loan papers,
etc.
Tax returns and information concerning tax payments
should also be located and stored in a safe place.
The
amount of time that you keep documents is up to you but there are some guidelines
for this.
Monthly banking account statements should be kept
for one year. If you get an annual statement summarizing your account you can
discard the monthly statements once that is received.
Tax
returns should be kept for at least seven years. The IRS can audit you up to seven
years after a return is filed. At a minimum, you should keep your state and federal
tax returns and any supporting documentation for that length of time but there
is nothing wrong with keeping them longer if you wish.
Mortgage
papers should be kept for the length of the loan and longer in some cases. Papers
concerning auto loans, boat loans, and personal loans should be kept for the length
of the loan plus one year.
