People always ask me where and how long they have to store their financial documents. So I have created a financial storage system that is super simple to set up and doesn’t take up much space or time.
The state of saving our financial records today
We are required to keep less and less paperwork … but there are times when it is important. I keep financial documents that include our mortgage, property assessments and wills. Our insurance documents came in very handy when our basement was flooded and I needed to know what kind of coverage we had. I like to keep some personal documents as well, like our pets immunization records, our medical records and school reports for our son. And finally, I keep all the renovation bills for our house; if we decide to sell, we can use them to help determine the sale price.
Make sense! But where do we keep these files?
First step: set up a small area where you can keep your financial information. I use a simple plastic storage bin which is designed to hold file folders. I like letter size files because most of what I’m keeping fits in them, they take up less space and anything larger can be folded.
Second step: divide them into sections that are colour coded. Here’s how I’ve done it:
- Green – It made sense to me to put all my financial documents in green file folders because green represents money. This includes our banking information, credit cards, investments, mortgage, employment, property assessments, taxes (one year only), utilities and our wills and power of attorney documents.
- Blue – Here I put everything that relates to insurance and vehicles gets filed in blue files. Life, health, car, house, chalet and boat insurance gets filed here. I also include vehicle maintenance, registration and licensing.
- Yellow – It’s bright and cheery so this is where I file anything to do with our personal lives. Each of us has a file so it’s easy to grab the information when we need it.
- Red – I’m not sure why I chose red for all of our home maintenance and renovation files because we’ll never be in the red, so I guess it’s just a bright colour that I like. I keep major purchase information here that include appliances, furniture, renovations, repairs and landscaping. It came in handy too. I needed my landscape plan earlier this year when I lost some plants to the dry weather. I can never remember the names of them, but there they were … all on my plan.
Third step: if you don’t have a will, make one. It you do make sure you store it somewhere safe, but easily accessible if something were to happen to you.
Using this simple system means that you can confidentially and immediately put your hands on all your important papers. Remember though, it’s not good to set it up and store it away to collect dust. These are living documents that you’ll need to review, keep up-to-date and keep safe.
Canada’s Money Coach, always sharing ideas to help you smartly and safely manage your finances. Get in touch today, give me a call at 613-875-5834.