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by admin
02 Aug 2024

Document Locator System: A Handy Aid For Keeping Track of Your Records

Are you able to locate insurance contracts, wills, and other important personal records quickly and easily? With this simple document locator system, you no longer need to wonder where to file a paper or where to find it.

  • The Document Locator System
  • Set Up Tabbed Sections
  • File The Documents
  • Documents You Should Be Able To Locate Easily
  • Where To File What
The Document Locator System

Most people have no idea where to start searching for their important records. They usually keep them scattered in various locations – tax records in a file cabinet, savings bonds in a home safe, wills at an attorney’s office, some contracts or deeds in a bank safe deposit box.

There’s a reason many people do not have an organized recordkeeping system: Organizing your records is stressful and confusing.

The Document Locator System is effective because it takes away that stress and confusion. This simple recordkeeping system provides an easy way to keep track of your important personal (not business) records, keeping them organized and available. You will not miss out on a tax deduction because you did not keep the necessary receipt. More importantly, the document locator system will help a spouse or executor locate your documents in case of death or disability.

Set Up Tabbed Sections

Set up tabbed sections in your files with the following captions (customizing sections as appropriate to your particular situation):

  1. Banking
  2. Children
  3. Credit and Loans
  4. Employment
  5. Estate Planning [including wills and post-mortem matters]
  6. Important Personal
  7. Insurance
  8. Investments
  9. Major Assets
  10. Professional Residences
  11. Tax Records
  12. Vehicles [including boats]

File The Documents

File the documents and other records listed in Column 1 in the file sections recommended in Column 2 of the Document Locator. Where the original or a copy is filed elsewhere, note this location in Column 3 of the Document Locator. You can also use Column 3 for any notes regarding the document (such as Passport – “Renew by October 12, 2022” or IRA – “Take first distribution by December 31, 2022”). Where your filing system suggests a file section other than that recommended in Column 2, just substitute your location for the recommended one. For items other than those named here, use the blank spaces at the end of the Locator.

This Document Locator is shown at the end of this Financial Guide.

Put a photocopy of the Document Locator, which will contain the locations of all your important documents, in a fireproof safe or safe deposit box.

In addition to the Document Locator System, prepare a post-mortem letter to a spouse or executor. This is also an essential part of helping your heirs and family members get your affairs in order in the event of death or disability. The purpose of such a letter is to provide them with the information needed to locate records or assets. This will prevent erosion of your estate by unnecessary taxes, unfounded claims, or just plain loss of assets.

The key is to develop and follow some type of recordkeeping system, not necessarily the one recommended here. If you have any questions, contact your financial advisor.

Cull your records every so often. By getting rid of the papers you no longer need, you minimize the ever-encroaching mountains of paper we all have to handle.

Documents You Should Be Able To Locate Easily

Certain documents, records, and other information should be easily locatable in an emergency. These include (1) your personal records, (2) a list of your assets, (3) your estate planning records, and (4) your financial records.

Personal Records

  • Birth certificates of family members
  • Death certificates of deceased family members
  • Marriage license
  • Divorce decree and custody agreement (if divorced)
  • Passports (updated)
  • Social Security numbers for family members
  • The names and addresses of family members, close relatives, and any persons mentioned in a will
  • Military records
  • List of previous employers
  • List of government employers
  • Medical records and health insurance cards for family members

In most cases, the reason these documents are needed is self-explanatory.

List of Your Assets

  • Description of all major assets that you own separately or jointly with your spouse or other person, together with the approximate values and location of deeds, titles, stock certificates, or other evidence of ownership.

Include cash, realty, investments, IRAs, retirement plan benefits, life insurance policies, interests in partnerships or other business entities, jewelry and other luxury items, automobiles, boats, antiques, coin collections, collectibles, art objects, and debts owed to you by others.

  • Appraisals of valuable items
  • Description of the approximate amounts of pension, military, and/or other benefits you or your spouse may be entitled to on retirement or death
  • Insurance policies (including group life, individual life, health, casualty, auto, etc.) and identity and phone numbers of insurance agents

Estate Planning Records

  • The whereabouts of your will and codicils, along with the name and address of the attorney who prepared them
  • Title to cemetery plot or other burial arrangement
  • Post-mortem letter to spouse or family members, to be opened after your death
  • Living will or other directions in case of disability

Financial and Other Records

  • Location of all safe deposit boxes, keys, and passwords
  • Important canceled checks
  • The names and addresses of your CPA, attorney, and any other professionals concerned with your financial affairs
  • Photographic or video record of house and its contents (for homeowners’ insurance purposes)
  • One statement for each bank account, IRA, mutual fund, broker, or other account you own, along with the name and telephone number of the primary banker, broker, or other contact person for each account
  • Brokers’ confirmation slips for purchases
  • A statement or other reference for any bank account that is not in your name
  • One statement or payment stub for each credit card, line of credit, or outstanding loan
  • Income tax returns for at least six prior years (including all supporting records for the past six years), and all prior gift tax returns
  • Records showing the original cost of any realty owned, cost of all improvements that can be added to tax basis, and depreciation taken (for business or rental property)
  • Bills of sale or receipts for major items
  • Equipment and appliance manuals and warranty information

Where To File What

Document Locator
DOCUMENT WHERE TO FILE OTHER LOCATION/NOTES
Accident reports Insurance
Adoption records Important Personal and/or Children
Accountant Professionals
Address book Important Personal
Alimony records Tax Records
Apartment – records for Residences
Annuity Investments
Antiques Major Assets
Appliances – receipts, warranties, and contracts for Major Assets
Appraisals of assets Major Assets
Assets – list of Major Assets
Attorney Professionals and/or Estate Planning
Auto insurance Vehicles and/or Insurance
Auto loans Credit and Loans
Auto mileage logs Tax Records
Automobile title Vehicles
Bank account statements Banking
Bills of sale Major Assets
Birth certificates Important Personal and/or Children
Boat insurance Insurance
Boat records Vehicles
Broker account statements Investments
Business interests Investments
Canceled checks – general Banking
Canceled checks – insurance Insurance
Canceled checks – tax related Tax Records
Casualty loss records Insurance
CD Banking and/or Investments
Cemetery plot Estate Planning
Charitable gifts Tax Records
Checking account statements Banking
Child support papers Important Personal and/or Children
Claims – insurance Insurance
Coin collection Major Assets
Collections Major Assets
Confirmation slips – from broker Investments
CPA Professionals
Credit cards – list of Credit and Loans
Credit card statements Credit and Loans
Credit report – from credit reporting agency Credit and Loans
Credit union papers Banking and/or Credit and Loans
Custody agreement Important Personal and/or Children
Day care records Children
Death benefits Employment
Death certificate Important Personal
Debts owed to you Investments
Debts you owe Credit and Loans
Deeds to homes Residences
Disability insurance Insurance
Dividends – records of Investments
Divorce decree Important Personal
Doctors Professionals
Dues – professional or union Tax Records
Employee benefits – description of Employment
Employers – list of Employment
Equipment – business use of Tax Records
Equipment – warranties for Major Assets
Expenses Tax Records
Fees – deductible Tax Records
Financial statement – your personal Credit and Loans
Forms – tax Tax Records
Funeral arrangements Estate Planning
Furs Major Assets
Gifts – taxable Tax Records
Government employers – list of Employment
Health insurance Insurance
Home – contents of, photographic records Insurance
Home office Tax Records
Home improvements Residences
Inherited property – record of basis Residences
Insurance policies Insurance
Interest – record of Residences and/or Tax Records
IRA Banking
Jewelry Major Assets
K-1 Forms Tax Records
Safe deposit box keys Banking
Lawyers Professionals and/or Estate Planning
Lease – home Residences
License – driver’s Vehicles
Life insurance policies Insurance
Limited partnership documents Investments
List of assets Major Assets
List of automobiles Vehicles
List of bank accounts Banking
List of brokerage accounts Investments
List of children’s schools Children
List of credit cards Credit and Loans
List of debts Credit and Loans
List of employers – government and private Employers
List of home improvements Residences
List of life insurance policies Insurance
List of safe deposit boxes Banking
Living will Important Personal
Loans – list of Credit and Loans
Maintenance of appliances Major Assets
Marriage certificate Important Personal
Medical expenses Tax Records
Medical professionals Professionals
Mileage logs – expenses Tax Records
Military discharge Important Personal
Military employers Employment
Mortgage note Residences
Mortgage payments and yearly statement Residence and/or Tax Records
Moving expense Tax Records
Mutual funds Investments
Naturalization papers Important Personal
Owner’s manuals Vehicles and/or Major Assets
Partnership statements Tax Records
Passports Important Personal
Paycheck stubs Employment
Pets Important Personal
Pension benefits – description Employment
Photos of family members Important Personal
Photos of home contents Insurance
Properties owned – list of Residences
Property damage – records Insurance
Prospectuses Investments
Real estate owned Residences
Real estate taxes Residences and/or Tax Records
Registration Vehicles
Rent – records of Residences
Residence closing – records of Residences
Retirement accounts Investments
Safe deposit boxes Banking
Savings accounts Banking
Schools – list of Children
Service – military Employment and/or Important Personal
Social Security numbers Important Personal
Stock certificates Investments
Survivors’ benefits-descriptions Employment
Tax returns and forms Tax Records
Traffic tickets Vehicles
Titles to vehicles Vehicles
Travel expenses Tax Records
Trust documents Estate Planning
Unemployment compensation Employment
Vacation home Residences
W-2 forms Tax Records
Warranties Major Assets
Wills Estate Planning

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by admin
02 Aug 2024

Recordkeeping Guide: How Long You Should Retain Your Records

Some documents and records need to be kept indefinitely, but most can be discarded after a prescribed period. Here are some rules of thumb as to how long you should keep them. Keep in mind that certain circumstances – legal considerations, for instance – dictate that documents be kept longer. The basic rule is: When in doubt, don’t throw it out. If you have any questions, check with your financial advisor.

Some documents and records need to be kept indefinitely but most can be discarded after a prescribed period. Here are some general rules of thumb as to how long you should keep them. Keep in mind that there may be individual circumstances in which legal considerations, for instance, dictate that documents be kept longer. The basic rule is: When in doubt, don’t throw it out. If you have any questions, check with your financial advisor.

 

Keep Indefinitely

  • Birth certificates
  • Adoption papers
  • Custody agreements
  • Death certificates
  • Deeds to property
  • Divorce papers
  • List of financial assets held (keep current)
  • Wills and other estate planning documents
  • Life insurance policies
  • List of previous employers
  • Marriage certificates
  • Passports
  • Photographic or video record of house and household contents
  • Military records / record of any governmental employment (e.g., armed forces)
  • Tax forms and supporting records relating to non-deductible IRA contributions
  • Records of paid mortgages

Keep for a Prescribed Period

  • Income tax returns (note that the IRS can audit you for 3 years after you filed a tax return, 6 years if you’re self-employed or under reported 25% of your income, and if you don’t file a return at all or filed a fraudulent return, there is no limit on the statute of limitations)
  • Records supporting income tax returns and deductions (W-2s, 1099s, receipts) – 1 year, 3 years if used for tax purposes and 6 years if self-employed
  • Loans that have been paid off (canceled notes or other evidence) – 7 years
  • Bank statements – 1 year, 3 years if used for tax purposes and 6 years if self-employed
  • Brokers’ confirmation slips for stock and mutual fund purchases – until security is sold
  • Records of selling a stock – 3 years
  • Canceled checks – 1 year, 3 years if used for tax purposes and 6 years if self-employed
  • Contracts – 7 years after expiration
  • Medical bills – 3 years
  • Credit card statements – Until the monthly bill is marked paid, but keep 1 year, 3 years if used for tax purposes and 6 years if self-employed
  • Utility statements – Until the monthly bill is marked paid, but keep 1 year, 3 years if used for tax purposes and 6 years if self-employed
  • Pay stubs – 1 year, until you received and reconciled with annual W-2 and social security statement
  • Receipts for home improvements that can be added to tax basis of home – 6 years after home is sold in a transaction that is not a “rollover” transaction
  • Insurance papers (all types of insurance) – after policy is renewed or 4 years after expiration or cancellation
  • Records of selling a house – 3 years after paid off
  • Owners’ manuals for appliances – until item is discarded or sold
  • Receipts for major warranted purchases – until item is discarded or sold
  • Warranties and extended service agreements – until expiration
  • Property tax records and disputes – 6 years after home is sold
  • Vehicle records (title, registration, purchase receipt, repairs and maintenance recipets, etc) – until sold
  • Savings bonds – until cashed in

Throw Out Now

  • Owners’ manuals and warranties for appliances and cars you no longer own
  • Receipts for credit card purchases if not major or related to a tax deduction – after reconciling with monthly credit card statements
  • ATM receipts – after reconciling with monthly bank statements
  • Sales receipts (unless used for tax purposes, then 3 years if used for tax purposes and 6 years if self-employed)

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by admin
02 Aug 2024

Saving Money: 10 Major Ways To Increase Your Nest Egg

One way to accumulate assets for retirement, education, or other major goals is to reduce your spending. Studies have shown that these savings can add up over the years to a substantially increased nest egg.

The familiar expression “A penny saved is a penny earned” overlooks the impact of taxes; a saved penny is, in fact, worth more, often much more, than an earned penny because you pay tax on an earned penny but not on the penny you save.

Thus, tax-free savings, with earnings compounding over the years, can really increase your nest egg, making it worthwhile to explore the following money-saving techniques.

This Financial Guide provides you with 10 tips for making sure that more of your money is slated for saving and investment. More important, it provides you with links to other Financial Guides that help you implement these tips and maximize the ultimate return.

  • 1. Prepare A Financial Plan
  • 2. Save Your Income
  • 3. Cut Your Mortgage Costs
  • 4. Cut Your Credit Card and Consumer Debt
  • 5. Cut Your Credit Card Costs
  • 6. Cut Your Bank Fees
  • 7. Fine Tune Your Insurance Coverage
  • 8. Cut Your Utility Costs
  • 9. Cut Your Phone Bills
  • 10. Forego One Big Expense Per Year
1. Prepare A Financial Plan

While most people appreciate the importance of a financial plan, too many put it off to the tomorrow that never comes. It is important to identify your goals and determine how best to achieve them. A financial plan can help you do this.

Related Financial Guide: Please see the Financial Guide: YOUR FINANCIAL PLAN: Getting Started On A Secure Future.

2. Save Your Income

Use an automatic savings plan to make sure that you save a percentage of your paycheck every payroll period. The percentage should be determined by your financial planning needs. Some people need to save 10 percent of their gross pay while others need to save more. If the amount saved goes to a 401(k) plan or another tax-deferred plan, so much the better.

But don’t stop with automatic savings. Put aside everything you can. If you invest $50 a month in a mutual fund, you could have as much as $25,000 in ten years, depending on the rate of return.

A well-thought-out budget will help you determine how much you should and can save.

Related Financial Guide: Please see the Financial Guide: BUDGETING: How To Prepare A Workable Plan.

3. Cut Your Mortgage Costs

  • Consider paying down your mortgage. For most people, paying down a mortgage is an effective way of saving and increasing net worth. Decide that you will pay $100 or $200 per month or more in mortgage principal, and do it faithfully.
  • Consider refinancing your mortgage. See if you can save money by refinancing your mortgage. Go through the calculations and see whether the reduction in your monthly payments would be worth the costs involved with refinancing. The general rule is that a reduction of at least two points will make it worthwhile to refinance if you intend to stay in the house for at least five years.

Related Financial Guide: Please see the Financial Guide: REFINANCING YOUR MORTGAGE: When And How Do It.

4. Cut Your Credit Card and Consumer Debt

To save interest, consider taking advantage of balance transfers, which offer a lower interest rate, typically zero percent (0%) for anyone with excellent credit and a stellar FICO score. You may have to pay a transaction fee of two to five percent (2-5%) on the amount transferred.

Related Financial Guide: Please see the Financial Guide: HOME EQUITY LOANS: How To Shop For The One That’s Best For You.

Once you have paid off a car loan or other debt, keep sending that payment to a mutual fund or other investment.

5. Cut Your Credit Card Costs

Cut your credit card fees and other costs by switching to a card that charges less interest or one that doesn’t charge an annual fee. Better yet, pay cash (or use a debit card) to pay for your purchases and avoid credit cards altogether.

Related Financial Guide: For suggestions as to other ways to cut credit card costs, please see the Financial Guide: CREDIT CARDS: How To Choose And Use Them Wisely.

6. Cut Your Bank Fees

There are several ways to reduce your bank fees. Find out what you need to do to get free checking and free ATM usage and do it. You may also want to join a credit union instead of using a bank since credit unions typically charge less for banking services. Here are a few more tips:

  • Keep a minimum balance in your account to avoid fees.
  • If you know you will be charged a fee for using another institution’s ATM, only use the ATM at your own bank.
  • Don’t keep too much money in a low-interest savings account. Find out how much money you’ll need access to in an emergency, typically three to six months’ worth of expenses depending on your personal financial situation, and keep only that amount in savings. The rest of your funds should be put to work. With interest rates so low, options include investing in stocks or mutual funds and parking your money in a long-term CD (check rates using Bankrate.com).
  • If you still write checks, avoid ordering them through your bank. Many check printers charge less for check orders than the printers used by banks.

If you find you are withdrawing too much cash, stop using your ATM card and make yourself physically go to the bank to withdraw the money instead. This may help you to spend less cash.

Related Financial Guide: For suggestions as to other ways to cut bank fees, please see the Financial Guide: BANK ACCOUNTS: What To Look And Ask For.

7. Fine Tune Your Insurance Coverage

Here are some ways to save on insurance of all types:

  • Life insurance policy. Not everyone needs a life insurance policy, but if you think you need one, then it pays to shop around. If you already have a life insurance policy, then it’s a good idea to periodically make sure you are paying the lowest premium on your life insurance policy because rates change frequently. Also, if you’ve quit smoking, you may be entitled to better rates after a few years.
  • Examine your life insurance needs. You may find that you are paying for too much coverage.

Related Financial Guide: For suggestions as to other ways to cut life insurance costs, please see the Financial Guide: LIFE INSURANCE: How Much And What Kind To Buy.

  • Insure your home and autos with the same insurer. You should be able to get a break by doing this.
  • Shop around for auto insurance every few years. You may be able to get a lower rate form a competing insurer.

Related Financial Guide: For suggestions as to other ways to cut auto insurance costs, please see the Financial Guide: CAR INSURANCE: 10 Cost-Cutters To Save You Money.

  • Smoke detectors, burglar alarms, and sprinkler systems. Installing these types of safety devices usually helps you save on the cost of homeowner’s insurance. Don’t forget to ask your insurance agent about other savings.

Related Financial Guide: For suggestions as to other ways to cut home insurance costs, please see the Financial Guide: HOMEOWNERS’ INSURANCE: How To Get The Best Coverage And Value.

  • Get rid of private mortgage insurance. Once you have enough equity in the home, ask your lender to cancel your private mortgage insurance.

8. Cut Your Utility Costs

Your utility may have a program that subsidizes making your home more energy-efficient. Look into this possibility. Even if there is no help available from the utility, it is worth it to caulk your windows and make sure your insulation is a high enough “R” factor.

Here are some other ideas:

  • Use energy-efficient bulbs such as CFLs (compact fluorescent lights) and LEDs (light-emitting diodes) instead of incandescent bulbs. Doing so will save you about 25 to 30 percent. Another advantage is that these types of bulbs last longer.
  • Keep the thermostat set at the lowest comfortable temperature in winter and the highest comfortable temperature in summer.

9. Cut Your Phone Bills

Today’s cost-cutting competition among phone service providers offers many opportunities for savings on your phone bills, such as:

  • If you have a landline phone, make sure you’re paying as little as possible for long-distance charges. Take the time to investigate which long-distance carrier will save you the most, and switch to that carrier. Or, bundle your phone with cable and internet service.
  • Use e-mail, texting, or Zoom video to correspond with relatives and friends.

10. Forego One Big Expense Per Year

For instance, skip your yearly vacation this year or take a less expensive one. Another way to save on a large yearly expense is to swap an expensive health club membership for a membership at the YMCA or shop around. Many fitness facilities offer special rates for new members. Paying one year or six months up front may also give you a break on costs.

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