Day#14: Organize Your Financial Paperwork

This is Day #14 of “25 Days to Healthier Finances”, a series of blog posts where Frugal Pinoy readers and myself work on 1 task a day to make our financial lives better. Please stay tuned for the next installment of this series, which will be up tomorrow. Here’s today’s installment:

Financial health isn’t just about the numbers, it’s also about organization. You need to keep your documents handy so that you can pull them out easily whenever you need to refer to them, rather than go on a week-long excavation.

Today’s Task: Organize Your Financial Paperwork

First, some general tips:

• You don’t need to buy accessories. Look for any old boxes, manila envelopes, and folders. You can start with those. My first financial document storage system was just my old collapsible folder from high school.
• If you don’t have the time to organize all your paperwork in one day, take baby steps. Taking even the smallest actions every day until you’re completely organized is better than putting off the activity forever.
• Be consistent. Once you start your system, stick with it. Don’t wait for bank statements and bills to accumulate. Store them properly as you’re done processing them. Doing this each time is better than going through half-organized, half-messy piles of documents later on.
• Purge regularly. Every two years or so, you can probably shred and throw away some of the documents such as bills, credit card statements, etc.
• In the end, do what works for you. Your organization system doesn’t have to be pretty, you just have to be able to pull out the right document in 2 seconds. Focus on what works rather than what looks neat or clean.

Here are some categories you can use to organize your files:

• Bills (you can organize them by company or by month)
• Bank statements and letters
• Home paperwork (title, deed of sale, real estate tax receipts, etc.)
• Receipt collection (if you’re tracking your monthly expenses this way)
• Investment paperwork (records of your investments, dividends paid, etc.)
• Credit card statements
• Insurance paperwork
• Tax-related documents
• Employment-related documents
• Paperwork for loans and other debts
• Family documents (wills, marriage certificates, birth certificates, etc.)
• Your IDs (passport, postal ID, etc.)
• Medical records

I only use some of these categories, but I keep all the documents in a single collapsible folder. Apart from the ease of finding documents, this will also make them easier to save during natural calamities and emergencies – I just have to grab one folder and I have all my important documents with me. The key, of course, is not to lose it. You should also keep photocopies of the most important documents (IDs, property titles, etc.) in a separate folder if you’re worried about losing the originals.

If you’ve already done this, feel free to share your tips and experiences in the comments section. Your suggestions may help other readers organize their own documents.

Image by yum from sxc.hu