Whether you recently got married, had a baby, bought a car, took out a student loan, or purchased a home or rental property, – your stack of important documents is growing.
When you finally make time to go through your file cabinet or the boxes of paperwork you have to figure out what to keep, you have another question.
How do you store important documents?
When you think about it, running your household finances is really like running a small business.
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Money comes in, and money goes out. You have income statements, items to purchase, bills to pay, and taxes to consider.
A small business would certainly struggle if the owner(s) didn't devise a plan. and you may struggle at some point too.
Creating a system to organize and store important financial documents and related essential paperwork matters. It can minimize your stress and maximize your time and profits.
But there is more to it than just putting things in labeled files in a drawer. That may be how you start, but it isn't a great long-term plan to keep your most important papers safe.
A Home Filing System for Important Documents
Important paperwork and documents you need to access often, and those that are not difficult or costly to replace can usually be put in your home filing system.
Even if you only need access to the information occasionally, having to go to a safe deposit box can be a hassle for something that isn't important to store away from home.
If you have a file cabinet or cardboard storage box, you can label and create folders for this type of paperwork. This could include your pay stubs, and bank account and credit card statements.
You can also store receipts from purchases, copies of utility and tax bills, and paperwork including insurance policies and medical records in your home filing system.
It's helpful as you update your budget and track expenses to have this information in files quickly and easily accessible.
If you pay your bills online, use an online bank, or have electronic statements, you can save them on your computer too.
It would be important to consider how you want to keep those files safe and to make backup copies of them on a flash drive or other storage device or with a web-based storage service.
It's very common for people to have a combination of digital and paper records to file.
A Home Safe or Secure Storage Cabinet
Some critical personal documents are difficult (and sometimes expensive) to replace.
These include original birth, marriage, and death certificates, passports, Social Security cards, divorce decrees, wills, and documents such as titles to a car.
Your property records from the purchase of homes or rental properties can go in your home safe too.
Some people put these documents in a safe deposit box at a bank, but that may make them difficult to access at night and on the weekends if you need them at home.
Some choose to purchase a home safe or secure storage cabinet for these documents. Others just keep the records in their home filing system.
If you decide to purchase a home safe or storage cabinet, consider getting one that is water-proof, fire-proof, and burglar-proof.
Storing a household inventory and video of your belongings in your safe is also recommended, along with a list of all of your important financial accounts too.
Essential Documents to Store Away From Home
You may consider storing documents away from home that you don't need access to often and those that are very costly or difficult to replace.
Many of the documents you would put in a home safe can also be put in a safe deposit box at a bank or post office.
But you shouldn't put estate planning documents there unless a loved one (who may also have power of attorney for you) has access to the box too.
You can also consider putting a safe deposit box in the name of your living trust.
Your attorney may also keep signed copies of all of your estate planning documents. Just ensure someone in your family knows who your attorney is and that the attorney has copies of your important paperwork too.
Making an Emergency “Grab and Go” Bag
In addition to the typical important documents you carry with you in your wallet or purse (driver's license, health insurance cards, medical information, credit, and bank cards), consider creating a separate bag or box you can take with you in the event of an emergency situation.
Ensuring the safety of you and your family is the highest priority in an emergency.
But if you have any time to spare before evacuating your home – a “grab and go” bag with all of your important information can save you a lot of time and stress if you need the information when you need to be away from home.
If you've created an “In Case of Emergency” binder for your loved ones, consider keeping a copy of it in the “grab and go” bag. It will already contain most of the important information about you and your family in it.
It is also suggested you:
- Keep cash in the bag to cover fuel, food, lodging, and basic necessities for at least a few days.
- Put a few snacks in the bag and a couple of bottles of water.
- Keep an extra phone charger, a set of keys to your home, vehicles, and to your safe or safety deposit box in the bag too.
Storing Important Documents
When you finally have your documents in order and safely stored, you'll be relieved. You'll also be proud you got the job done. For many of us who've put off this work, it will indeed have really felt like a job!
Taking the time and energy to sort through piles of important papers, deciding what to keep, and storing them properly will save you lots of time and headaches later.
Remember, your system doesn't have to be fancy – it just needs to work for you.
Deciding whether to buy a home safe or secure cabinet will be something to consider.
- What kind of safe would you buy?
- How big would it need to be?
- Or would it just make sense to get a safe deposit box and put the “really” important paperwork and valuables there?
Only you can make the final call on where to keep your documents. The most important thing is that you make a plan and get it done.
There are plenty of people who wish they did when something does happen and they can't locate or easily obtain a copy of documents they need.
Vicki and Amy are authors of Estate Planning 101 – a Crash Course in Planning for the Unexpected -coming soon from Adams Media.