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Sort Out Your Finances

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David Bach’s latest column on Yahoo Finance serves as a checklist for getting your personal finances in order. I went through this process several years ago but it would have been nice to have some guidance. Simply getting your information together in one location is the essential first step in organizing your financial life. Here’s how Bach suggests you categorize:

* Tax Returns. I file away my tax returns and supporting documentation. For the last several years, I also keep electronic versions (PDFs) of my returns. They get backed up on DVD-ROM with all of my other files every so often, as my computers have a tendency to crash. (DVD-ROM isn’t the best solution for backing up important files from a hard drive, but it’s the most affordable.) Bach says to keep tax returns for longer than seven years.

* Retirement Accounts. I have a 401(k), a Roth IRA, and I’ll be adding a SEP IRA shortly. I keep my retirement account records close to each other, but organized by account. I keep the statements but throw away all the extra junk they send each quarter (after reading).

* Social Security. I get my benefits statement every year and file it away, not far from my retirement accounts folder.

* Investment Accounts. Like the retirement accounts, I keep the quarterly statements, read the junk to ensure there are no changes to the account (like added fees) that will affect me, and if there’s nothing worth saving, I don’t.

* Savings and Checking Accounts. Generally I save confirmations of account openings which will include my account numbers and company contact information. I save my monthly statements but every so often I discard older papers.

* Household Accounts. I don’t own a house, but I have a folder for all of the relevant rental information including my lease. I also keep folders for utility bills, which help me see that I’m expending less electricity this year but paying more.

* Credit Card Debt. I save my monthy statements and discard them occasionally. I track all expenses in Quicken and access my accounts online so keeping these records isn’t necessary. I pay off my card every month and I’ve never run into any problems.

* Other Liabilities. Student loan records are filed away. The loan companies get tricky when it comes to origination and consolidation, so I like to make sure I have complete records.

* Insurance and Medical Records. I keep an eye on my insurance company as well. I had a check-up at the dentist recently, and insurance is covering less of my expense this year. (Meanwhile, I’m paying more for the “same” coverage.)

* Family Will or Trust. I don’t have this yet. My family is me.

* Children’s Accounts. I have no children.

Bach did a good job outlining the major categories of files you should start with to organize your personal finances. The only thing I think is missing would be a file for personal documents such as birth certificate and passport.

Published or updated March 28, 2006.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar 1 Anonymous

I don’t have any children either, but I do have a will. Most of my investments and retirement funds will transfer automatically to my parents and then to my brother, since they’re designated as my beneficiaries. But my condo, car and some of my personal assets are a different story.

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avatar 2 Anonymous

Flexo, I would be interested in hearing some more about your SEP IRA strategy. I am considering doing this, but there are a lot of factors to consider, so getting a different perspective seems in order.

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avatar 3 Luke Landes

Sure, Dus10. I’ll write about it when the funds are deposited in hopefully less than two weeks.

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avatar 4 Anonymous


If you have a chance, I’d strongly recommend you consider an individual 401k instead of a SEP IRA.
I had a SEP IRA and learned that the individual 401k was much more flexible, allowed me to put in more money (the SEP maxes out at 25% of your income, while the indiv 401k allows you to put $15k in BEFORE it applies the 25% rule).
Making Our Way

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avatar 5 Anonymous

Here’s another way to sort things out: Check out “If Something Happens to Me,â€Â? a detailed
workbook by financial planner Joe Hearn. The workbook helps people organize financial,
legal and insurance information and provides step-by-step guidance as to what families need to do after losing a loved one. For more information on the book, visit

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avatar 6 Anonymous

Very good tips.

If you are an honest tax payer, keep all the records for 4 years.

Also remember that IRS can get very nasty. So invest lot of time when filing your returns on details.

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