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How to Organize Your Financial Records


While the task of organizing your financial records may seem like a tedious and unappealing afternoon-long chore, we highly recommend taking the time to do so. Keep in mind, your recordkeeping system doesn’t have to be complicated. As long as you understand it and can maintain it, that’s good enough! Here are some guidelines to follow to make the organization process a little easier.

Divide and Conquer

Your financial documents can be divided into two main over-arching categories: short term files and long term files. Here are some of the items that should be included in each category:

Short Term:

• Bills
• Bank statements
• Canceled checks
• Credit card statements
• Health records
• Income tax receipts for deductions, income, etc.
• Receipts for large purchases
• Insurance policies

Long Term:

• Bank statements
• Credit card statements (with home improvement expenses)
• Canceled checks (from past seven years)
• Home improvement receipts
• Warranties
• Income tax records for previous three years
• Inheritance papers
• Retirement investment statements
• Legal papers about properties and formerly owned properties
• Reports from trusts
• Birth certificates
• Social security cards
• Burial vault/plot deeds
• Wills/Living wills
• Copies of Powers of Attorney
• Car titles
• House titles
• Investment account/pension/annuity/IRA statements
• Stocks and bonds

A More Detailed Look

Once you’ve divided your documents, you can organize even further by dividing documents into a three year, seven year or forever pile. Three years is how long the IRS has to initiate an audit, seven years is how long the IRS has to pursue underreported income, and they can always pursue claims of fraud. Here’s how to organize your documents even further:

Three years:

• Household bills
• Credit card statements
• Receipts for small purchases

Seven years:

• Canceled checks
• Check registers
• Bank statements
• Pay stubs
• Tax returns and supporting documents


• Receipts for major purchases (or until they are sold)
• Annual investment statements
• Inheritance papers
• Insurance policies
• Mutual funds statements
• A copy of your will
• A copy of your HPOA and DPOA

Where to Store Your Documents

A good document storage system does not need to be elaborate, it just needs to be a system that you can keep up with. Whether that be in a filing cabinet, a binder, or a box, here are some general tips to help keep things organized:

• Use file folder or tabs to make locating files easier
• Keep most recent files accessible and towards the front
• Clean out your files at least once a year
• Keep all files together

Leaving a Letter of Instruction

While your financial document organization system may make sense to you, it might not to whomever you have entrusted to access your records once you are gone. For this reason, it is important to leave behind a letter of instruction. This letter can be kept with the financial records you have in your home and should include important information on where to find certain documents and how to access them. If you have a safe deposit box, you should also leave information on how to access its contents.
Armed with these tips, the daunting task of organizing your financial records can become much more palatable.  But remember, these tips may not apply to every person’s individual situation. When in doubt, be sure to consult your investment professional. At Walsh & Associates, we’re happy to help with any of our client’s financial concerns.

Securities offered through LPL Financial member FINRA/SIPC. Financial planning and investment advice offered through Walsh & Associates, a registered investment advisor. Walsh & Associates is a separate entity from LPL Financial.

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