Blunders and Tips for Organizing Your Financial Life

Are your financial records in order? Do you need help with your organization?

Earlier today I was reading an article on Yahoo! Finance about digging out and getting yourself organized.

In the article, there were a few common blunders to avoid as well as a few tips to follow as you try to put some order in your financial life.

Organizational Blunders to Avoid

  • Neglecting to write a will :: Guilty as charged. This is something that has been on my to-do list for awhile now but always seems to get pushed behind other tasks. Something I have done recently was to create a record for my wife that listed all of the financial accounts, including the website for online access and any associated username and password. In the face of tragedy, you do not want your loved ones in a bind.
  • Throwing away tax returns after a year or two :: I’ve yet to discard a tax return as I keep them all filed in my archive. Along with each tax return I have an envelope that contains all of the supporting documents that are relevant to that return. However you file your financial records, hang on to those tax records for about 6-7 years but definitely no less than 3 years.
  • Saving too much paper :: See above. I’ve had a bad habit of keeping everything. I had utility bills from 7 years ago and phone bills from 10 years ago. Why? That’s a good question. Over the last year or two, I’ve sorted through everything and have come up with a much better system. Although I now have a few boxes of documents that are waiting to be shredded.
  • Storing the only signed copy of your will in your safe-deposit box, instead of giving a copy to your lawyer or other trusted adviser :: Okay, I don’t have a will nor do I have a safe-deposit box or lawyer. Once I complete my will, I will be sure to store a signed copy with a trusted 3rd party.
  • Neglecting to carry an emergency list of loved ones, doctors and advisers in your wallet :: I’m not doing too well on avoiding these blunders as I don’t carry any contact information in my wallet. About the closest thing I havei n my wallet is my healthcare insurance card. My only concern with carrying around a list of contact information is that if you lose your wallet, that information is all available to the person that finds your wallet.

Organizational Tips to Follow

  • Direct Deposit :: The only time that I have not utilized direct deposit is when it was not an available option. Having funds such as your paycheck or dividend check automatically deposited to your account eliminates the possibility of misplacing a check and saves time as you don’t need to make a trip to the bank.
  • Paper certificates :: Are you holding on to any old paper stock or bond certificates? It is a good idea to transfer the paper certificates to your stock broker as that will prevent you from losing the certificates.
  • Filing taxes online :: This is something that I have been doing for quite some time and love the simplicity and speed of filing my taxes online. The popular choices for tax preparation software are capable of handling just about any tax situation so I would highly recommend filing online if you are not doing so already.
  • Update regularly. Back up your records regularly. And print several copies. :: As I mentioned earlier, I’ve got the natural habit of saving quite a bit of information. As more of my records have moved to eletronic media, I am sure to update my information on a regular basis and have a standard backup routine for my records.

As you work to improve your own financial organiztion, you will be on the right path if you try to avoid these common blunders and consider implementing the tips mentioned above.

Do you have your own life lessons on blunders or tips related to organization? I’d love to hear them!

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3 Responses

  1. It may be a good idea to hold onto some of those bills, people who had phone service got a refund this year on their taxes.

    • mnc says:

      True. However it was still possible to take the refund even if you did not compute your actual tax as there was a standard value that everyone could use.

  2. It was good getting the refund this year but I took the standard refund without the bill.

    I did a will while in the Air force but time to get another.

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