Buzz
Here’s one of those small tasks you can get out of the way before tax time arrives: organizing your financial paperwork.
This doesn’t require fancy color-coded files or a perfectly alphabetized system, but it does mean ensuring all your essential account details are easily accessible when needed.
Record all of your account details
This task will probably take the most time. Write down all your financial accounts, along with login details, account balances, and beneficiaries, as recommended by Mint. You can do this on paper, in an Excel sheet, in Google Docs, or using another app. Personally, I store mine in a password-protected folder in my note-taking app.
The goal is to keep it easily accessible, but it also needs to be secure. If you're using something like Google Docs, ensure your password is strong (and are you using a password manager yet?).
Here are some examples of accounts you should include:
Checking and savings accounts
Credit cards
401(k)s and IRAs
Brokerage accounts
Student loan accounts
Car loan
Mortgage
Medical debt
Auto insurance
Home/renter’s insurance
Life insurance
Taxes
“For accounts related to debt, make sure to note the interest rate, monthly payment, outstanding balance, loan provider, loan term, and any other important details,” advises Mint.
If you haven’t designated beneficiaries for your accounts yet, now is the perfect time to do so. For instance, if you're caring for an aging parent, here are some questions to ask them to ensure you gather all the necessary information.
Review your credit report
Ideally, you should be checking your free credit report every four months. Now is the time to see if any credit accounts are missing from your list above (and as always, watch for errors or potential issues).
Mark financial emails
Search your inbox for financial emails using keywords related to your bank, 401(k) provider, and other accounts. Then, flag them with a unique color or group them together so that all the information is easily accessible in one place.
Sort through your financial paperwork
After managing your online accounts, it's time to tackle the physical paperwork. If you have a pile of financial documents you've been meaning to sort out, set aside 10 minutes to organize them.
Start by deciding if you really need to keep that outdated cable bill. “Take time to review documents to understand what they’re for,” advises Bankrate. “Then ask yourself, ‘What’s the worst thing that could happen if I discard this? Can I request a new copy if needed? Will I ever need this again?’”
Chances are, the answer is no. Retain only the most current versions of documents (like your bank statements or auto insurance policy) and shred the outdated ones. The one exception: Tax returns. Keep these for three to seven years, depending on your circumstances. Here’s a guide on how long to keep various types of paper documents.
Next, think about moving your financial filing system from the basement to a more central spot, recommends Bankrate. If your paperwork is closer to your computer, for example, you're more likely to stay organized. Keep similar documents together: tax returns with tax returns, mortgage info with mortgage info, and so on. For different filing system ideas, check out this article.
Finally, set a recurring reminder in your calendar to stay on top of your paperwork. Now that you’ve completed the bulk of the work, maintaining it should be a breeze.
