At the end of Part II, I said we would talk about how to manage your current financial records, and here it is.
Organizing Current Financial Records
What do you do with all the everyday financial records—household bills, brokerage statements, IRA records, paycheck stubs and bank statements? Well, if you’re me, you see how many of them you can have sent to you electronically instead of in the mail. I pay as many bills as possible online and it’s a simple matter for me to store the statements by year in a “finance” file on my computer. When I need a receipt for an online payment, I save it as a PDF instead of printing it out. I’m pretty sure I’ve saved a small forest by now, not to mention the wear and tear on my printer and shredder.
For bills that come in the mail and need to be paid the same way, I have a 3-ring binder with slip-in page protectors that I use as storage pockets. One pocket holds stamps, one holds envelopes and another holds return address labels. The remaining pockets hold personal correspondence that needs to be addressed and business correspondence that needs to be addressed. And then there is a pocket for personal bills and one for business bills. As the bills come in the mail, the envelopes are opened, all the stuffers removed and the bill and its payment envelope go into the appropriate pocket.
On my designated bill pay day (ok, my husband’s designated bill pay day because I hate doing it), he just gets out the notebook, pulls out what he needs and pays them and the book goes back on the shelf until the next week. Once the bill is paid, it gets filed. If a document or bill will be needed for taxes at the end of the year, it either goes into a file folder marked “current taxes” in the financial drawer of my file cabinet or into a computer folder of the same name if it’s an electronic statement.
For everything else—utility bills, credit card receipts, etc.—we only keep those for six months. Every six months, I clean out the files and we start over. Bank statements get kept for a year, as do pay stubs. Once we have a W-2, the pay stubs get shredded. Annual brokerage and IRA statements get kept permanently. Bills are sorted into file folders by type of expense. All credit card statements go in one folder together. All utility bills go in one folder together. All medical bills go into one folder together (medical records are filed individually by patient name–I don’t store medical bills and medical histories together). I do keep all of my bills and financial records together in one drawer of the file cabinet. This makes both filing and retrieval much easier. Within that section, I store the folders alphabetically.
Because I’m very lazy smart, I time my six-month purge for the month that the local shredding company has a free drop-off. I toss all my papers into a box and drop it off for them to shred. This way I don’t have to spend hours at the shredder and there’s no mess to clean up afterward.
Now that all your important papers are sorted, you can turn your attention to all those magazine articles, recipes and really great ideas you’ve clipped and saved. But this was plenty of work for one day, so I’ll cover that in my next article of the series.
How do you keep track of your bills? If you have a system that works better for you–meaning you can easily put your hands on a bill without having to hunt through all your drawers or dig through piles–I’d love to have you share it. I am always up for great new ideas, so please be sure to leave your comments and questions in the comment section below.
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