SC&H Group Blog: "Expertise Beyond the Numbers"

When It Comes to Keeping Records, Not Every Piece of Paper is Equal

Following is an excerpt from the most recent Baltimore Gay Life Personal Finance column by Amanda Wooddell Wilhelm, a Manager at SC&H Group.

Each month, we are all inundated with bank, credit card, and mortgage statements, utility bills, canceled checks, and the like. While some of these documents may be electronic, many are still on good old-fashioned paper, which can pile up very quickly. And many of us are afraid to get rid of anything for fear that we will need it down the road.

By understanding the distinction between which documents must be kept and protected, and those that can be tossed after a useful shelf life, you can thin those bulging files.

Vital Records

Suppose you lost all your documentation in a natural disaster. How would you get access to your money, and even establish your identity, with your bank and other financial account holders? These are vital documents that should be protected from natural disasters and theft in a secure bank safe deposit box or a home safe.

These include passports, birth and marriage certificates, automobile titles, trust documents, insurance policies, wills, social security documents, and stock and bond certificates.

Essential Records

When you apply for a loan – mortgage, auto, or education – the lender requires proof of income. If you notice that money is disappearing from your checking account, you’ll need bank statements to back up your claims of unauthorized transactions. If you have investments, you’ll need to have those records of your capital gains in the event of a tax audit.

Get Organized

If you have income from sources other than an employer, it’s especially important to keep track of cash receipts. A small notebook or a few sheets in a separate file fold will do for recording income as it arrives. Create a separate file to track your expenses.

If you keep essential documents on your computer, keep it in an encrypted file and make sure the files are backed up in the event of a cyber-attack, technical failure, or theft. If you use financial management software, remember you still must retain original documents as evidence of past transactions.

Make record de-cluttering an annual ritual, like spring-cleaning. It will make more room for the documents you’ll acquire as you move closer to achieving your ultimate financial goals.

These and other key insights are outlined on page 26 of the February issue of Baltimore Gay Life. If you have any questions about this content, we welcome you to contact Amanda here.

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