Organizing Financial Documents

Protecting your financial documents and other important records from theft or destruction is essential. You'll need many of them each year at tax time, of course, while others may not be needed for years. Here are a few tips to help you keep every document safe and sound.

Easy Access Documents - These include your pay stubs, bank account records, W-2s, receipts and anything else you may need to refer to regularly to pay bills or file your taxes. For simple organization, set up a file drawer with folders for each category. File documents away as you receive them, rather than leaving them piled on the corner of a desk or chucked in a shoebox. After you file taxes each year, seal all the receipts, W-2s and other records used in a clearly labeled envelope. Tax records should be saved for at least six years, though some experts recommend saving them indefinitely. Any records pertaining to real estate owned should be kept forever. Mutual funds and other investment statements should be saved for as long as you own the investments, and at least six years beyond that time.

Long Term Documents - These include powers of attorney, insurance policy documents, passports and wills. You will likely not need to access these documents as often, but they could be essential in the event of a family emergency. Store them in a fireproof lock box within your home or office.

Longer Term Documents - These include marriage, birth and death certificates, social security cards, military records, property deeds and the like. These documents are safest stored in a safe deposit box. If you choose a safe deposit box for storage, make sure that your spouse, your executor, or a trusted family member or friend knows how to get to your safe deposit box and retrieve its contents.

I hope these tips help you keep all your financial documents and important papers safe and sound.