Organize Your Documents – It’s Not Just for You

Not very many people have  a good solid system for organizing there important documents and financial papers. With it being tax season I thought it would be a good time to discuss some of the how’s and why’s of document organization.


Why Should you organize your documents:

  1. The biggest reason to organize your documents is so they are easily found in the event of you die unexpectedly.  Your loved ones are going to have enough to worry about in the aftermath of your death, they don’t need to be searching through piles of crap to find the documents they need.
  2. The taxman cometh, and he don’t mess around.  Having everything organized will make surviving an IRS Audit that much easier. Make sure you maintain your tax documents for at least 6 years, which according to the IRS, is the maximum length of time they have to audit your records.
  3. If it isn’t organized you don’t really know what you have, or what it is worth.

How I do it:

  1. I use hanging folders organized into: Tax documents, Household Accounts, Banking Accounts, Insurance, Retirement, Investments, Will, Business, and Liabilities.
  2. Within each folder I have regular folders with the account name which holds the detailed documents, so for instance my tax folder has individual folders for 2002-2008 taxes which each contain a copy of my return and all supporting documentation.

You should make sure that you have accounted for all of your major accounts and streams of income, put your statements and other documents into the folders. The most important thing you can do is to make sure everyone who needs to know, knows where the documents are located.  It doesn’t help to have a great system of organization if no one else will know how to find it. Do yourself and your family a favor and get organized.

Photo (aliwest44)

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