Less mess means less (financial) stress

How to get your financial information in order

This is for those of us who have been keeping bits of paper in a box with the intention of filing it one day. If you are one of the latter, it’s time to declutter.

Creating your own system will help keep your records in good order and prevent important records from falling through the cracks. Your system will require both hard copy and digital records to be kept and organised. Make time with yourself to maintain these records. Just before the end of the financial year or the end of the year is a good time to do it, or a quarter if you are self-employed and need to do BAS. Being organised saves you time – because you always know where you keep things and saves you money because you are not losing track of debts, bills, and even assets – you are staying in touch with what you have.

Here’s my recommended system.

You will need:

A file — either a folder or a small vertical file box that has tabs or sections for splitting up your paperwork.
A scanner (or use the camera on your phone)
A place for digital storage such as a computer, portable hard drive or USB Stick; or a cloud-based storage drive

What you need to keep and what you can throw away

Now, let’s sort out what you need to keep for financial purposes.

ID — copies of your passport, driver’s license, Medicare,

healthcare, etc.

Bank account details
Home loan agreement or rental agreement
Superannuation details
Share statements
Other investment details
Insurances
PAYG Summaries, tax returns etc.
Car information
Warranties
Memberships

You don’t need to include all of your statements in your filing, as many are available online (even when an account is closed — check with your bank or lender). File any notices you have received, and any information related to the opening and/ or closing of the account.

Storing hard-copy records

Put all of your hard-copy paperwork in one place to start with. Go through your pile and throw out everything you don’t need, such as items not on the list above, or old receipts. Remember, you need to keep tax records for five years from the lodgement date. There should now be a small, manageable pile of paperwork left that needs to be sorted. Put it into piles of financial years, sorting from oldest to most recent.

tip

Only keep physical financial documents when needed as they take up space and end up as clutter. If when you throw things out due to age, or irrelevancy or if you have scanned them into digital format, use a secure bin or shredder. Identity theft is a real concern, and you don’t want to give unscrupulous people the advantage.

Storing digital records

Scan and save to a portable drive or cloud-based storage system any documents that you only have in print. Keep this drive in a separate place from your hard-copy folder. Name and date your folders and documents so the information is easily accessible quickly should you need it quickly.

Ongoing management of your financial records

You need about an hour a week to keep on top of your paperwork (even if most are electronic) — less if you are working with a partner. To make sure you don’t let papers pile up, open mail as you get it and sort your incoming mail in a portable box. Keep the file box in a handy location where you open your mail, like the kitchen or your home office. Set up a separate email account that is purely for bills and statements and saves only the important stuff. Get rid of the rest!

Give yourself half an hour to an hour every fortnight to stay on top of bills, fines, and expenses, and to review how your accounts and savings are working for you.

You basically want to check what you are spending – occasionally review bills on sites such as https://www.energymadeeasy.gov.au/ or https://compare.energy.vic.gov.au/

Make sure that you also keep a list in a safe place of where all your stuff is.  You can use LastPass or similar to keep your information and passwords secured. You never know when an accident or illness can leave you incapacitated, so have a list that is clear and easy (but not too easy) to find.

 

Contact Phoebe

Phoebe is available for interviews, guest appearances, article commentary, and talks on a range of topics relating to property, mortgage broking, and personal finance (particularly for women!).