There are a number of reasons why it is important to have a good organization system in place for your important documents. These documents include vital records such as birth certificates and marriage licenses, wills, bank statements, and tax records. In the event of a theft (for example, your purse or wallet), a natural disaster, or a sudden illness, you may need to access documents quickly and if you do not have an effective organization system, you will be unable to do so. Many Americans do not have a good organization system in place because they are overwhelmed with all of the paperwork that they have and do not know what to keep and what to get rid of.
The following tips will help you to easily organize and access your important documents.
Start with your vital records
Many people keep important documents such as their birth certificate, marriage license, passports, will, and Social Security card in a special place. Unfortunately, they do not always keep all of the documents in the same place and if they needed to find the documents quickly, they would be unable to do so. The best place for storing these items is either in a fireproof box in your home or a safe deposit box in the bank. In addition to vital records, you should also make a master list that includes contact information and a list of insurance policies, bank accounts, doctors, and medications. Keep documentation such as titles and deeds for property investments such as your home and vehicle. You should also include a copy of items from your wallet such as your driver’s license and insurance card. It is wise to make a copy of each document. Copies can be scanned and placed on a memory stick for easy access or kept in a separate records book so that they can be accessed quickly.
Get rid of paperwork you do not need
Start going through your piles of paperwork and get rid of things that you no longer need. As a general rule, you should keep bank statements, investment records, and tax documents for six years. Keep credit card statements and utility statements for one year. You only need to keep loan agreements and information regarding property such as your home and vehicle if they are active. Once you sell a home or vehicle, you no longer need to keep those records. Keep copies of receipts for significant purchases, service contracts, and warranties as long as you own the items. Once you have sorted out the items that you do not need, make sure that you shred everything to help prevent identity theft.
Decide how to store your items
Many people use a filing cabinet or file box to store their important documents. You need to choose a system that will work for you so that you will be able to stick with it. Make a master list of all of your accounts and records that you are going to file. Some people create a file folder for each account and then store them alphabetically. Others prefer to sort them by category (for example, bank accounts, credit card accounts, utilities, warranties, insurance information, etc.). Some people even color coordinate their folders based on category.
Once you have decided how to store your documents, be sure to let your attorney and the friend or family member who will be handling your affairs in the event of an emergency know where and how they can access all of the information. There are several resources available online to help you keep a master list of your documents that you can share with these individuals. Once you have organized your documents, stay on top of things. Go through your files at least once a year to get rid of records that are outdated.
