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The value of keeping effective financial records

By Ruth Racey
Published: Tuesday, November 10th, 2009

Saving for future needs is one difficult thing to achieve. Most often people hesitate doing this because they cannot figure out where and when to start since there are so many things to take care of. Now here is one good way to begin saving money, keeping and maintaining good financial records. 

Record-keeping is definitely a dull way to spend time, especially if you are just all alone in your house one rainy Saturday. It may seem difficult and tedious, but its rewards really pay off in the long run, especially if you need a quick look at important financial documents. You will be surprised that all your junk – papers, documents, files, receipts, letters and mail – all fit into one small cabinet. This helps you can find any record that you need efficiently and conveniently. This saves not just money, but also time, and especially plenty of frustrations. All you have to do is take the initiative of cleaning all the mess up. 

How will you be able to accomplish this seemingly impossible goal? Read the following record-keeping methods to have an idea. Afterwards, choose one or several parts of each method and put them together. It is your choice and style. Here are the guidelines: 

  1. Keep all things, including papers, documents and others in the same place or a general area, such as a cabinet, closet, or desk.
  2. Try to categorize each bit of document or file. Do this alphabetically or by subject: investment statements separate from bank statements, utility bills separate from credit card documents, and so on.
  3. If you are married, or have a partner, you can both decide who will take care of keeping records. Whether you do it separately or together, it is up to you. However, if no agreement has been made, assume the responsibility or else the kids will take care of them – and you would not want that.
  4. Have an established routine of updating things – weekly, monthly – just make sure you would not leave them inside your cabinet or closet to be forgotten.
  5. You can put irreplaceable records in a safety-deposit box for emergency purposes. It will not cost a lot of money, and it can preserve your most needed documents. Include records such as marriage, birth, and divorce certificates; car/motorcycle titles; savings bonds; wills; and so on.
  6. Every year check your records for outdated information like tax returns you got more than seven years ago, or old policies. However, you still need to keep things that relates to items with an extended life, like appliances, including their warranties, receipts, and manuals.

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