Why Should You Keep Records?
Keeping family records in an organized manner saves time, trouble, money and frustration. Recordkeeping is also important because:
- Income tax preparation requires information on tax deductions and you must have support documents for each deduction.
- Death, fire, theft or another type of disaster may require records to establish ownership; records also help in an estate settlement and insurance and/or benefit claims.
- Records document certain transactions; if someone makes a mistake or official records are destroyed, your records may be needed.
- Organized records could shorten the time for collecting insurance, military benefits, or an income tax refund.
- Evaluating records provide information for planning future spending. Records provide a summary of your financial situation and can help you keep tabs on where your money goes.
The System and Plan
A household record keeping system does not need to be complex – just easy to use and designed for your specific needs. A successful system requires cooperation from everyone in the household. In other words, you’ll need to work as a team to keep valuable documents organized. Even if they are just valuable at the time.
Make it a goal to complete the following items over the next few months. Check off each task when finished. By doing so, you’ll be on your way to an organized household.
- Set up a home filing system. If you have school-aged children in your home (5-18 years), establish a system to manage their report cards, transcripts and all documents during high school as they prepare for college and/or employment. (Yes, teach them how to keep their documents safe and secure.)
- Rent a safe deposit box OR buy a fireproof/waterproof box to store important papers.
- Begin gathering your important papers listed on the next page
- Set up Duration of Ownership files (detailed Guide for Family Records)
- Set up permanent files for items to keep forever.
- Set up Update Annually/Permanent files
These tasks seem time consuming, but the time invested now will pay off in the long run. If you must evacuate your home quickly and do not have a fireproof or waterproof safe at home, be sure they are in a location that you are able to get to. Also if you chose to organize electronically – grab your flash drive. Another idea is to have a second flash drive with a trusted friend or family member. If you are choosing paper copy, the paperwork to keep forever should be copied and placed with a trusted friend or family member.
