How to Organize Financial Records

How to Organize Financial Records

By Erin Huffstetler | 01/16/2014 | 11 Comments
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Need to do something to whip your financial records into shape? Let’s create a binder for them.

Financial Records Binder

Here’s a printable cover that you can use to dress up your binder.

Financial Records Binder Tab

And now that we have that taken care of, let’s talk about what needs to go inside. Everyone’s finances are different, so I recommend you start by sorting through all of your financial records to get a handle on what you have. Take the time to shred the stuff that you no longer need, and group like items into piles. If your current system hasn’t been working well for you, make a list of what hasn’t been working, and see if there are ways to address that.

When I reviewed my family’s financial records over the holidays, I quickly came to the conclusion that we had more categories than we needed, so I worked to simplify our filing system. Ultimately, these are the categories that I settled on for my binder:

  • Current Loans
  • Past Loans
  • Insurance
  • Credit
  • Retirement
  • Investments

Pretty simple, right?

And once I had that figured out, putting my binder together was a breeze. I bought a pack of pocket dividers, created a tab for each category and now I have a spot to tuck everything.

Amortization Table

Because I’m all about keeping financial goals front and center, I made our mortgage amortization table the first page of my binder. Now, every time I open it up, I’ll be reminded of our goal of paying our mortgage off early.

More About My Categories

Most of the categories in my binder are pretty self-explanatory, but there are a few that I want to touch on briefly. First I’d like to talk about my current and past loans tabs. In the past, I’ve had a folder for each loan, but that just felt more complicated than it needed to be, so I took it down to two folders. The current loans folder holds a copy of our mortgage contract and the contracts for any other loans that we have outstanding. It also holds a copy of the most recent statement for each. When the new bills/statements come in the mail, I’ll tuck them inside the folder, and shred the previous statement. This should eliminate the need for yearly file purges. Yay for that!

The past loans folder serves a very specific – and important – purpose: when we get something paid off (a credit card, car loan, etc.) I tuck proof of repayment in this folder. This gives me a record to go to, if we ever need to contest an error on our credit report, and it also happens to be fantastically motivating. There’s nothing like going over your past financial successes to fuel your excitement for your current financial goals.

And finally, a few words about my credit folder … This folder holds a copy of our most recent credit report. It also includes letters showing anytime a credit account has been closed at our request. Account closures can sometimes be recorded wrong on your credit report – and it’s nice to have proof that an account was closed at your request – and not because of a financial misstep.

Working to get your filing cabinet under control? Stick with me as I share my binder system, and I’ll give you everything you need to get the job done. Here are the steps that I’ve shared so far:

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Comments

  1. This is an absolutely fabulous place for me to find the things I need since we just moved and need to re-organize everything. Thank you, thank you, thank you!!!

  2. YOUR SITE HAS BEEN VERY HELPFUL WITH HELPING ME TO FINE TUNE MY FAMILY FILE ORGANIZATION.
    THANKS FOR SHARING THIS WITH ALL OF US WHO ARE TRYING TO GET ORGANIZED 🙂

    • You’re certainly welcome. I’m glad to hear you’ve found my filing system useful 🙂 I was just telling my husband the other day that we’ve now had our system in place for a year, and I still love it as much as I did when we first set it up. It just seems to work for us. The kids even know where to put things/find things — and that’s nothing short of magic.

  3. I love this! I do have a question. Within the financial records…where do you keep your financial snapshot and bill pay checklist? Is there a different binder for the actual monthly bills? My accounting is out of control currently and I am trying to find a way to stop the insanity.

    • Hi Stacey,

      I actually keep my bill pay checklist and financial snapshot on the bulletin board next to my desk. I like to have that constant visual reminder. I think it would also work to stick in in the front of the financial records binder or to create a separate folder just for bill pay.

      I’m working on expanding my bill pay system now, so I should have some more things to share before long.

  4. question: what would be the best way to organize financial statements/docs that you’ve had a longggg time?

    should you: scan monthly statement into a folder – or only scan(keep in notebook) the dec statement and the end of year tax docs?

    been scanning dec statement and EOY tax docs, but thats time consuming when you have accts since forever (still open).

    ideas? thanks Erin! love your ideas.

    • Hi Sue,

      I pretty much do the same thing Consumer Reports recommends.

      I’m a bit old-school, so I still like to have hard copies of things, but I did snag a Neat receipt scanner at a yard sale, and I plan to start using it to keep up with my receipts. Since most receipts are printed on thermal paper these days, they often fade out — meaning you’re left with no record of your purchase. All of our financial documents go into our Financial Records binder. You can see how I set that up here.

      We used to keep all of our financial records in a filing cabinet, but I found that caused us to keep more than we needed to and made it harder to put our hands on stuff. Our current system is much easier. Hope that gives you some ideas.

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