My Financial Filing System--The Sequel

The second part of my financial filing system deals with keeping permanent records.  These include tax records, insurance policies, warranties, home improvement records, and the like.  To organize these records, I use notebooks and boxes.  ETA:  Oops!  I forgot to include the link to the first post on the financial filing system, which details how I set up my daily files.

I realized as I wrote this that you will also need to get some heavy duty plastic page protectors.  I recommend the heavy duty ones over the medium weight because they will sometimes have pretty thick booklets placed in them and the heavier duty version holds up better.  Another reason to go shopping at Staples, lol!

Now, using the two notebooks, label them:

            Warranties

            Permanent

And  here you can see my old, ratty notebooks.  Not. so. nice.  But, I just ordered new blue Martha Stewart notebooks!    Got a few new boxes, too, just for fun!  You, however, dear reader, get to see the original ones!  Why?  Because this way, your system can only look BETTER than mine and you will feel SO GOOD!  Right?

The Warranty Notebook:   Fill this notebook with page protectors.  Maybe 10-15 of them. Now,  all of your warranties and instruction books will be kept in the warranty notebook in page protectors, two per page protector.  If you have a lot of appliances, you will definitely need the 2” binder.  The original receipts will be stapled to the warranties.  I also write on the cover of the instructions for each appliance the serial number, the model number, and the date of purchase.  This way when a major appliance like an oven or freezer breaks, I don’t have to kill myself moving it around to try to find the model number!  About once a year, look over the warranty book and throw away the warranties that are expired and any instruction guides for things you no longer own.

If you don’t have too many instruction booklets, you could use another hanging file folder in your file crate for this material.  I just find the folder gets too bulky, so the notebook works better for me.

The Permanent Notebook:  For this notebook, make up a few dividers:

            Insurance Policies

            Home Improvements

            Account Information

            Personal Information

Under “Insurance Policies”, you are (obviously!) going to put your current policies.  It’s helpful to have a sheet of paper in the front of this section with a list of policies, their numbers, and the dates they are paid, as well as the information on your agent such as phone number and address.  Just keeps it all in one place.

“Home Improvements” will hold the receipts for major home improvements that will affect the cost basis of your home if you go to sell it.  Any repair receipts for home repairs or work that is covered with a warranty can go here, too. To be clear, I put warranties for appliances (like a furnace or air-conditioner or refrigerator) in the Warranty notebook, but I put receipts for repairs on the house (like a roof repair) that are guaranteed  or warrantied in the Home Improvements notebook.  You can file them however it makes sense to you, just always file them the same way. You can also include any surveys, plot plans, septic system plans, etc. in this section.

“Account Information” would include letters with your pin numbers, a list of bank account numbers and names, and a list of credit cards numbers and the phone numbers of the card companies.  Or, you can just copy the front and backs of your cards and keep those copies. 

Also in this section are account agreements.

“Personal Information” could include a copy of your driver’s license, copies of any passports your family members have, SSN’s, and vaccination records if that applies.

I also actually have a divider for purchase confirmations of stock and bond investments so that I have these handy for tax purposes.  So, if you have any investment accounts, you might want this section, too.

I keep this notebook in my file crate at the back of all the monthly files.  That way, it's handy but out of sight.

Car titles, loan agreements and payoff papers, property titles, original birth, marriage, and divorce certificates, passports, and any papers related to the closing of health insurance accounts should be kept in a fire-proof strongbox or a safety deposit box at a bank, not in a notebook.

The Tax Boxes:  

Now, label one box per year for each of the prior years (the current year is in your open file system near your mail sorting location, remember?):

Taxes 2010

Taxes 2009
Taxes 2008, etc. 

Horizontal labels are purely optional. You can write directly on the box. I use one box for each year’s taxes.  In fact,  some years I have to file so many different returns (don’t ask!)  that I have to use the 3”-4” thick white boxes that are available at the UPS shipping centers.  They have a flip-up top similar to these (please note these are sold in bulk!).  These flip-top boxes are a good option,  and come in more than one thickness.

 In each box, I store all of the tax returns, all of the back-up documents, all of my return receipts for  mailed tax returns or confirmations for e-filed taxes, and any communications from the IRS for that year (except notifications of tax-payer ID numbers which I keep in  the "Permanent" notebook under “Personal Information”--be SURE to keep these! Once the IRS gave my daughter's number to another taxpayer!!!  It took me a year to get it straightened out, and if I hadn't saved the original document assigning the number to her first, I probably never would have gotten it straight.)  If I ever need any information for that year’s taxes, it is so easy to find it in the box.  The boxes stack well on a shelf and after ten or fifteen years, I shred the contents.  

One final idea:  Although it’s not part of my financial system, I also have two notebooks for the children.  Each one is used for 4 children.  These notebooks are loaded with page protectors and in them are baptismal records, confirmation records,  birth certificate copies, transcripts from community college courses, and anything else special that I would like to keep permanently, more or less.

Hope some of these ideas help you get your own financial house in order!

My Financial Filing System

I promised you I’d post about my financial filing system,  so here I am!  My system is based on Dawn's filing crate system and was an extension of my use of her ideas.  After I had gotten my basic filing crate system set up and had used it for a while, I began to realize that I had other paper-filing needs that the weekly system didn’t quite cover.  Mainly, these needs were in the area of financial paper filing—account statements, tax information, warranties and receipts, and insurance information.

I had tried several times to get a workable filing system set up for these papers, but somehow it never quite worked.  I had a constant pile of papers that needed to be filed, and once I filed something, I could never find it!  So, I started by noting what I wanted to accomplish:

1.    Have an easy-to-access filing system.  Easy both to put papers IN and find what I needed and take it OUT.

2.   Have a simple system.  One problem I have had is an overly complicated system with way too many specific files.

3.   Have a system that integrates with my other file-crate system so I can keep everything in one place.

4.   Have a somewhat portable system (as I go back and forth between two houses in two states!)

Soooo, with all of this in mind, I developed a system that has really worked well for several years now. 

I order to set up my filing system, you will need:

8 or more hanging file folders (number depends on number of children)

24 regular tabbed files, plus a few for "flubs"

labels

a pen

2 notebooks, 1”-2” in thickness

2 or more boxes  for archives (I’ll explain how to use these and the notebooks in the next post)

First, label 6 of the hanging file folders.  Each one is labeled to cover a two month period:

January/February

March/April

May/June

July/ August

September/ October

November/ December

Then label two more hanging folders:

Current

Taxes-201x (current year)

If you feel you need a place to store non-time sensitive materials for individual children, you can label one hanging folder for each child.  This is not for archiving materials, but for current information, etc. that doesn’t belong to a particular week and so isn’t suited for the regular file crate system.  I only have one hanging folder labeled for my high school daughter to store transcripts,  information on repeating events and times (so not just for one week), etc. 

Now, label the files that go inside each of these larger hanging folders.

For each of the monthly hanging folders,  get out three file folders and label them:

Accounts

Health

Paid bills

For the current hanging folder, label two file folders:

Bills to pay

Other

For the taxes hanging folder, label four file folders:

           

Payments

Deductions

Income

Notifications

So, now that you have all that stuff labeled, it’s time to put it in its place…literally!

Put the 6 monthly hanging folders behind the corresponding months in your file crate, like so (OK, now I know I need a better camera than my iPhone, but...):

Now, take out the current bimonthly hanging folder, and put it, the “current” hanging folder, and the “taxes” hanging folder in a small, open (this is key!) file box of some kind in the same place that you sort your mail.  For me, this is a Petersboro filing basket at the end of my kitchen counter; this is where I stand to sort my mail.  I also keep the current month’s hanging folder from the regular file crate system in this basket, as well as one or two other handy files.

So, just to be clear, I have right now in my basket on my counter:

     **January/February folder from the regular file crate system with weekly file folders inside.

    **January/February folder for my financial filing with three file folders inside: Accounts, Health, and Paid Bills.

     **Taxes hanging folder with four file folders inside: Payments, Income, Deductions, and Notifications

      **Current hanging folder with two file folders inside:  Bills to Pay, Other

      **One hanging folder for my daughter.

           

I sometimes will add other hanging folders if I am working on a project and want to keep all the information together in one place. 

           

In addition to my basket file on the counter, I keep hanging folders for the remaining months in my main file crate.  There are bimonthly  folders for  financial materials and also the regular file crate system bimonthly folders.  You can't really see this set up, but I have the bimonthly folder with the weekly files inside in the front and the financial bimonthly folder with the accounts, health, and paid bills files in it right behind.  Then comes the next bimonthly regular folder, and the corresponding financial folder behind it, and so on.  This functions almost like an archive; I only need to access these files when the bimonthly period changes or if I have to find an old record to settle a financial question of some kind.  As I cycle through the year, I review the material in the previous year's financial folder and shred anything that I don't need to keep permanently.  Because I keep permanent records elsewhere (I'll explain this next week), I usually can shred everything in these files. So, for example, when I took out the January/February file this month, I had old receipts, health bills and statements,  and account statements from January/February 2010.  I looked through them for any tax related documents I might have missed, and then shredded the rest.  This is so FANTASTIC, as it keeps financial papers from just accumulating for years!  I can't tell you how much I love this part of my system!

 

Now, the mail arrives.  Sadly, it arrives nearly every day.  Mostly, it’s garbage, but there are also items like bills, account statements, etc.

Take all the bills you need to pay and put them in the current folder under “Bills to Pay”. Or, even better, pay them at once.  Once they are paid, put the stubs in the monthly financial folder under “Bills Paid”.

Take all account statements.  If you need to balance them, put them in the Current folder under “Other”.  If not, look them over and then put them directly into the “Accounts” folder in the current month’s hanging file folder.  It doesn’t matter how many different accounts you have; I have several for each of the children plus our personal accounts. They might be savings, checking, or investment accounts.  Just file them by month.  I have found I rarely need to go back and check them, but when I do, it only takes a minute or two to flip through the bi-monthly file and find what I need.  There is no need to overfile!

Anything that pertains to taxes goes into the tax file.  Income stubs, acknowledgements of donations, etc.  On the insider of the “Payments” file folder, I record the date, amount, and check number of any regular or estimated payments I make during the year.  I also keep copies of the receipts of  purchases that have significant amounts of sales tax in the "Deductions" file, since I itemize deductions.  I’ll explain in my next post what I do with the original receipts.  All receipts for paid real estate taxes or personal property taxes go in the “Deductions” folder as well.

All  paid health bills, Explanations of Benefits, HSA statements, doctor’s receipts or statements go into the “Health” folder in the monthly hanging folder.  If you have someone in the family with serious or ongoing health problems, and you need to keep track of test results, etc., I suggest you set up a separate notebook or folder for that person.  But keep the paid bills  and insurance statements filed by month.

That will be most of your serious mail.  Throw away the junk.  That leaves really only two other types of items:

Time-based things like invitations, raffles, community events, etc.:  These go into the “Current” folder if they require a response, and then into the regular file crate system under the appropriate week.  I also put the Sunday coupons in the corresponding weekly folder.

Non-time sensitive items:  These might include things like a letter you would like to answer, insurance policies, warranties, information on accounts such as pin code numbers. 

Anything you need to work on, goes under “Current” until it is completed.  This is really a reminder file for me.  For example, I was working on a dispute with a credit score company (they had an item on my credit report that wasn’t correct), so I put all the papers and notes on that under Current.  It kept it in front of me so that when I did my weekly paper work/ bill paying, I remembered to keep on checking on the progress of this item.  I think when I worked in the business world, we called these “action items”.  Sounds kind of aerobic!

The permanent items that you may need to refer to, such as the insurance policies or warranties or old tax records,  will go elsewhere.  That’s for the next post!