Mastering your financial world is a helluvalot easier when you have your documents arranged in an orderly fashion with all the information you need at your fingertips. By having a system for filing, retaining, and eliminating documents, you'll save yourself a great deal of time and trouble.

The System

Over the years, we've developed a very handy system that will help you stay on top of your financial documents and your financial world. It uses a pair of the most important principles of organization, and it's only two steps. Here it is:

Step 1: Keep or Destroy. When a financial document arrives by mail, email, or app notification, immediately decide whether to keep or destroy it. Keep it by filing it in the appropriate paper or digital folder. Destroy it by shredding or deleting it.

Step 2: Out with the Old. As you file new documents - particularly periodic statements - be sure to destroy old documents, as needed. In doing so, you'll keep your file cabinet from bloating with unnecessary information.

Notice that incoming documents are handled once. The principle of single handling forces you to make an immediate decision to keep or destroy any new documents you receive. By practicing this, you will eliminate the all too common clutter of unopened, unfiled documents.

In the second step, you're forming the habit of minimalism by consistently destroying old, unnecessary documents. Whenever we work with clients to organize their financial documents, nearly everyone has several hundred pages of documents that are completely unneeded. 

The Quick List

Your file cabinet should have the following file folders and content, as applicable:

  1. Auto Insurance | policies, insurance cards, most recent statements
  2. Automobiles | title, copy of most recent registration
  3. Bank Accounts | up to one year of statements
  4. Brokerage Accounts (non-retirement) | up to one year of statements
  5. College | scholarships, up to one year of savings/investment/loan statements, FAFSA forms, tuition and fee statements
  6. Credentials | diplomas, certifications, awards
  7. Credit Cards | up to one year of statements
  8. Credit Reports | most recent credit report from each bureau
  9. Dental | insurance policies and cards, up to one year of statements
  10. Disability Insurance | policies, most recent statements
  11. Employee Benefits | most recent benefits enrollment confirmation
  12. Health Insurance | policies, insurance cards, up to one year of statements
  13. Homeowners Insurance | policies, most recent statements, annual inventory video
  14. Identification | birth certificates, Social Security cards, passports, copy of driver's license
  15. Legal Documents | wills, trusts, living wills, powers of attorney, final directives
  16. Life Insurance | policies, most recent statements
  17. Loans | loan contracts, up to one year of statements
  18. Medical | vaccination records, up to one year of invoices and explanations of benefits
  19. Net Worth Statements | at least one statement per year
  20. Pets | ownership documents, vaccinations, insurance records, all medical history
  21. Real Estate | all deeds, liens, appraisals, most recent property tax bills
  22. Renters Insurance | policies, most recent statements, annual inventory video
  23. Retirement | Social Security statements, pension plan documents, up to one year of account statements
  24. Taxes | current year tax-related documents including income and deductions
  25. Vision | insurance policies and cards, prescriptions
  26. Warranties | all unexpired warranty documents

Questions, Comments, Suggestions

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