Over time, important physical and digital documents tend to accumulate. If you don’t have things organized, you may have a hard time managing your day-to-day finances, accessing important documents, or keeping your information secure. Plus, keeping your affairs in order helps protect your loved ones in case of emergency.
The following steps can help you get your finances organized.
1. Keep track of online accounts
Virtually every aspect of managing your day-to-day finances can be done online. This convenience comes with a cost: numerous online accounts, often with unique login and security requirements. Keeping track of these details can be challenging if you rely on memory alone. Instead, consider:
- Storing all login information in a single, secure place. List out usernames, passwords, and any additional security details required to access the account. Make sure to keep this list somewhere safe. Consider sharing a copy, or details of where to find this list, with a trusted third party.
- Use digital assistance. Online password managers exist to store your login details across accounts, meaning you only need to remember how to access the password manager. These tools can be a helpful way to share access to certain accounts with relevant parties (family, assistants, colleagues) while protecting sensitive information.
Creating an easy way to manage and remember account information helps you stay organized and protect your security, since it allows you to follow the latest best practices around using diverse, complex, unique passwords.
2. Securely store digital documents
Online accounts may help you streamline the way you store digital (and even physical) documents. Generally, you can download statements, tax documents, and other important details from your online account going back a certain number of years.
If you can easily access these forms, you may not need to store digital or paper copies in your records.
If you do decide to keep important documents on your computer, or on the cloud via a personal login, take security precautions:
- Ensure your software and operating systems are up-to-date and running current antivirus software.
- Encrypt and/or password protect your individual files.
- Use two-factor authentication (2FA) to access any cloud-based accounts.
- Avoid accessing folders where you store sensitive documents if you are using public or unsecure Wi-Fi.
3. Protect your paperwork
Not all important documents are digital in nature. For instance, you should keep copies of the following documents on hand, but it doesn’t matter whether the copy is digital or paper.
- Driver’s license.
- Birth certificate.
- Passport.
- Marriage certificate(s) and/or divorce decree(s).
- Social Security card.
- Titles and/or deeds.
- Will, and any related documents.
Copies of these documents can help you access key information and/or obtain replacements in an emergency. For most official business, however, you will need original documents or certified copies. Make sure you store your copies of important documents in a different place than the original.
When it comes to how you store physical documents, think about organization and security. For basic documents, a filing cabinet tends to work best. Depending on the sensitivity of the information you include, you can opt for a locking version.
For additional security, consider a home lockbox or safe. These devices come in various shapes and sizes with a diverse range of security features. Consider investing in a fireproof version, particularly if you’re storing original documents. Pick a way to sort your documents that makes sense to you and addresses the complexity of your financial life. You may want to organize by year or date, document type (insurance policies, bank statements, titles, etc.), or by general category (house, cars, work, etc.).
4. Remember to purge
Your financial life can get cluttered fast, especially if you’re hanging on to every bank statement or medical receipt for the past several decades. At least once a year, spend a few days reviewing your recently accumulated financial documents (both physical and digital) and discard anything you don’t think you’ll need in the future.
Generally, you don’t need to keep tax-related documents for more than seven years. Just be sure to shred or destroy any old returns or supporting statements before throwing them out. (Note: Depending on your location, you may not be able to recycle shredded paper.)
If you need help figuring out the best way to organize your finances, a Bogart Wealth Advisor may be able to help. When you share documents with Bogart Wealth, they are stored securely. We can then use those documents to help you better understand your assets, liabilities, and overall financial health as we work together on a comprehensive financial plan. With a plan in place, it can be much easier to organize your documents accordingly.
