Spring is the perfect time to get a fresh start. While most of us think of spring cleaning for our house, it’s also an ideal time to apply the same tradition to organizing our finances. Here are a few ways to help you take charge of your financial records.
Tip 1: Decide what to discard
Given that only 40 percent of Americans believe they could locate an important document when needed1, consider shredding what you don’t need. Keep these guidelines in mind:
| Documents | When to discard |
| Bank deposit slips | After you reconcile your statements |
| Banking statements | After a calendar year; store with tax returns if used to prove deductions |
| Brokerage, 401(k), IRA, Keogh, other investment statements | Shred monthly and quarterly statements as new ones arrive; hold annual statements until you sell the investments |
| Credit card bills | After you check and pay them, unless needed for tax filings |
| Household warranties/receipts | After you no longer own the household items |
| Insurance policies | After you renew them |
| Investment purchase confirmations and 1099s | Hold until you sell, then keep with your tax records for seven years |
| Loan documents | After you sell |
| Pay stubs | After you reconcile them with your W-2 |
| Receipts | After you reconcile them with your credit card/bank statement unless needed for a warranty |
| Savings bonds | Cash them in when they mature |
| Social Security statements | When you get a new statement |
| Tax returns/supporting documents | After seven years |
| Vehicle titles | After you sell the vehicle |
Tip 2: Decide what to keep
We suggest that you keep these items in a safe-deposit box and photocopies for your records.
| Documents | When to discard |
| Birth/death certificates | Never |
| Employer defined-benefit plan communications | Never |
| Estate-planning documents | Never; Give copies to your attorney/executor |
| Life-insurance policies | Never, or when a term policy has ended |
| Marriage licenses/divorce decrees | Never |
| Military discharge papers | Never |
| Safe-deposit box inventory | Never; review/update annually |
| Social Security cards | Never |
Tip 3: Make an insurance inventory
Make a video with your smart phone of your home. Document both the inside and outside of the home. Don’t forget your garage, vehicles and other structures. Photograph new possessions and record their value.
Tip 4: Put a back-up plan in place
After you scan or download your records, don’t forget to create a back-up on a separate hard drive or cloud storage system to prevent future data loss.
Tip 5: Review your accounts
Consolidate your bank and brokerage accounts, closing any inactive ones and shredding any unused checks. This is also a good time to examine the fees you pay and shop for other options that would reduce or eliminate these charges.
1Consumer Reports National Research Poll
Image: CC BY-SA 3.0 Nick Youngson
The information herein has been obtained from sources believed to be reliable, but Wealth Dimensions Group, Ltd. (“WDG”) does not warrant its completeness or accuracy. Prices, opinions and estimates reflect WDG ‘s judgment on the date hereof and are subject to change at any time without notice. Any statements nonfactual in nature constitute current opinions, which are subject to change. Projections are not guaranteed and may vary significantly. Past performance is not indicative of future results.