Everyone knows that over time your messy and scattered pile of financial documents can gain sentience and begin to hurt you and others in your household. We’ve all had that cat or grandmother that was eaten by a financial mess monster before it was finally dealt with, or problems with the IRS from the time that a mess monster stole your identity and ran off with your refund check.
It’s important to keep your mess monster under control, and to neatly file your various documents after the end of the year so that these monsters don’t have the chance to develop or become dangerous. Here are some tips so that you don’t end up with an uncontrollable mess monster.
The One Place
To ensure that your bills are paid on time, and to prevent you from losing documents, you should designate a single place for your financial documents to go as they come in so that you know where to look for something. This will also prevent your mess monster from developing those really long annoying tentacles that spread throughout your house.
Once you’ve designated that place, make sure that you address it at least once a month. Set a reminder in your phone or calendar for the time when you usually pay your bills, and use that time to organize the documents there as well.
The Right Tools
Some people think that only computers are effective weapons against mess monsters. Other people swear by the use of pen and paper, and a keep a detailed notebook by hand. The answer is that the best weapon against a mess monster is the one that works the best for you.
The Treasure
If you have original copies of tax returns, wills, stock certificates, and your banking passwords, you shouldn’t leave them lying around. Those sorts of things tend to make your mess monster much more dangerous very quickly. Instead you need to lock them up in a home safe or safety deposit boxes. Also, if you have a will, make sure that your attorney or financial advisor keeps a signed copy of your will in a secure location too.
The Good Fight
So, when you’re going through your pile to organize it, you need to know what to keep and what to get rid of. Many papers, like regular household bills, can be shredded after you pay them (you should keep statements that show you’ve paid them for about a year).
Tax Returns need to be kept for at least seven years, including the supporting documentation. If you’re like most people, one of those accordion filing folders can easily store ten years without taking that much space.
Anything that shows the original purchase price of any investments or real estate should be kept as long as you own the investment or property plus another seven years too.
If you’re interested in more information on this, we have a brochure in our office that lays out how long you should keep a slew of things, and we generally include them with tax returns we prepare for clients. If you need a copy, stop by or give us a call.
Remember that you need to handle your pile of things at least once a month to keep your mess monster at bay. If your mess monster gets too serious, a CPA can definitely help you slay it, but in those situations it can be very expensive (think of us as dragon slayers par excellence).
Tags: weirdly funny