Organizing Your Finances

How organized are your finances? If you were to find yourself in a tricky situation and needed to find a document would you be able to locate it quickly?

Getting organized is a big part of getting your finances in order. These days that doesn’t mean purchasing a filing cabinet! Online banking has made it easier to keep track of your finances and track down statements and receipts but you can’t always rely on it.

Keeping Digital Records

Keeping digital records is a perfectly fine way to keep track of your financial life as long as you keep those files secure and have backups. You don’t want to have everything on one computer and then lose that computer!

To create an easy to navigate system, set it up like you would a physical filing cabinet with folders for each year and sub-folders for taxes, loans, cars, home, receipts and other expenses. Try and make sure you track down all the documents you can for each category so if there is ever an issue or you have to prove a payment you have that information already on hand.

Make sure to also include any contracts you have signed along with terms and conditions for credit cards and warranties for large products you have purchased in that year. This will make it easy for you to find things if you need them in the future.

Also save any digital records in two places to ensure that they don’t disappear if your computer breaks. Use an external hard-drive or flash drive and keep it in a safe place in your home like you would the physical records. You can also save to the cloud to ensure that a backup always exists!

Keeping Physical Records

If you feel more comfortable with hard copies, a physical filing system is perfectly fine.

Set it up by starting with your income tax and organize by year with all associated documents. You may not have copies of everything but it’s worth it to print out the filings themselves. For more recent returns try to gather all the documents.

Next you should focus on your credit card and banking info. Include any credit card and banking statements and credit reports you have on hand. 

Finally file away purchases and receipts. If you write things off on your taxes, save receipts for those by year. Include any larger purchases and their associated warranties so they are easily on hand if something breaks or needs to be returned. 

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