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Financial Files-Your Money Minder
by Samuel Peery
Disorganized finances have consequences, from late-fee penalties to underfunded retirement savings. The good news is that although there are many steps along the road to financial security, the first—creating a home for your financial information—is the easiest.
 All of your summary-level, as opposed to transaction-level, financial information needs to be organized and kept in one place, ideally in a loose-leaf binder. (A computer-based file or other type of digital storage can work as well, provided you have adequate backup.) This financial binder—or book—needs to contain the following documents:
NET WORTH STATEMENT
Tracking your assets versus your liabilities is the best way to get a handle on your financial progress in one quick view.
* List all of your assets (bank and investment accounts, your home, car and other costly possessions), one per line, with a value for each.
* Add the values together to see your total assets.
* Calculate your liabilities (mortgage, loans, credit card debts), and list each and the dollar amount on a separate line. Add the cost of each liability to see your total debt.
* Subtract your total liabilities from your total assets to unveil your net worth. Update this page at least once a quarter.
 BANK AND INVESTMENT ACCOUNT NUMBERS
I’m always amazed by how many people open accounts and then forget they have them. Keeping an updated list of where your accounts are held, and under what name and account number, is a great tool. It’s also important to make note of any user names and passwords.
I believe keeping a hardcopy list of accounts and passwords in a secure place (such as in a home safe or locked drawer) is perfectly safe. However, if it makes you nervous to store that kind of information in one place, free software programs such as Clipperz (clipperz.com) and KeePass (keepass.info) provide secure, digital methods for storing passwords. The only hitch is you’ll need to remember the password to your passwords.
THE BILLS LIST
Specifically, you’ll want to track:
* The name of the company
* When each bill is due (e.g. the 15th of each month or every four weeks)
* The exact or approximate amount due for each bill
* How each bill is paid (cash, check, credit card, direct bank transfer) and from what account
* User names and passwords for each account, if applicable
MONTHLY BUDGET
When my wife and I discuss our budget each month, we sign the budget and file it in our financial binder. This may seem strange, but it’s amazing how the meeting and documentation help us avoid arguments. Keeping the previous budgets for reference makes it easier to plan for future months or compare whether expenses have gone up or down over time.
 THE DECISIONS LIST
Whenever you make a financial decision or have a financial discussion, write down the action to be taken. This will prevent you from forgetting or having repeated discussions with a spouse, partner, family member or financial advisor.
SAVINGS GOALS
Sometimes it’s less overwhelming to think about saving for smaller objectives rather than one huge goal. For instance, savings can be looked at in the following way:
* Short-term goals: Purchases costing less than $300
* Medium-term goals: Purchases over $300, such as vacations, new furniture or even home ownership
* Long-term goals: Savings for retirement and a child’s college
INSURANCE
If your insurance companies provide you with summaries of your coverage, insert the pages into your binder each year—or summarize on your own how much coverage you have in each insurance area, including health, disability, dental, life, auto and homeowner’s.
TAX TIME
If your accountant or tax preparation software provided you with a summary of your tax return, keep it in your binder. Unless your actual tax return is too large, keep a copy in the binder as well.
CREDIT REPORTS
Save the most recent version of your credit report from each of the major three agencies: TransUnion, Equifax and Experian. By law you are entitled to one free report a year from each company. To get your reports, visit annualcreditreport.com.
Organizing your finances isn’t difficult, but it does take time to protect your money.
WHAT DOESN’T BELONG
IN YOUR MONEY BINDER
✱ Monthly bank or credit card statements
✱ Routine receipts
✱ Cancelled checks
✱ Information about closed accounts
Samuel Peery
Samuel Peery writes about personal finance on his website gettingfinancesdone.com, which is listed in the top five recommended personal finance blogs by wisebread.com.
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