Welcome to the Document Edition of What Can I Do Today!
Today, let’s work on getting our vital documents together and organized. As these events are supposed to be things we can do in 15 minutes or less, what you can do is gather your documents together over the course of the next week as you clean the house, organize a closet, or other chores where you might run across things you need to save. Then, when you have time, you can develop a filing system for each item.
I’ll admit, organizing paperwork is an incredible challenge for both the Advice-Wife and I. We have a poor filing system, and things often get misplaced. What we’re looking for is usually somewhere, but often not where we can actually find it. Thus today, like every episode of WCIDT, I’ll be following my own advice.
First, what documents should we be holding onto? Let’s start with these (I’m assuming your Driver’s License lives in your wallet!):
Social Security Card
These are your primary identification documents, and are often used to apply for other pieces of identification, such as a Drivers License. While not everyone has or needs a Passport, it is often a better form of identfication than your Driver’s License. If you plan on travelling out of the country, work on getting your Passport well in advance of your trip, as it can take some time. There are methods to expedite the process, but it makes it more expensive.
I actually don’t have a copy of my Birth Certificate; I sent off for a certified copy few years back in order to get my Passport, but then I proceeded to lose it. Thus, I will go here, pick my state, and follow the instructions in order to get a copy. Remember, to get a copy of your birth certificate, you need to apply in the state where you were born, not the state you are currently living in.
The next category of documents we should put our hands on are our estate documents. There are few things more tragic than an extended probate process due to a lack of simple planning. If you do not have a Will/Living Will, I’d recommend starting the process (though it is outside the scope of this episode!). One of my wife’s clients offered to do up a Will/Living Will for us as our wedding present. We’re still working through the process, but we’ll put it back on a front burner today!
So look for these:
Death Certificates of family members where you were a beneficiary
Power of Attorney
Life Insurance Beneficiary Forms
DD 214 (If you were in the Military)
Financial Account Beneficiary Forms (such as for a 401(k) or an IRA)
Status of Finance Document – This is something that I put together quarterly that shows the state of our family’s finances, including where each account is held, along with passwords for my wife so she doesn’t have to worry about having access to our accounts should something happen to me.
Previous Year Tax Returns
W-2’s and 1099’s
There are some other financial documents that should be on hand, usually because they will make life easier in the event you need them for some reason. However, for this project, putting your hands on the first two categories is a great start! If you are truly bold though, work on a filing system for these as well:
Pay Stubs – 6 months (these are useful to have on hand when applying for a mortgage or car loan.)
Bank Statements – (If you can get these online, don’t worry about keeping more than a rolling 12-month cycle)
Chartitable Giving Statements (For example, if you give to Goodwill, they will give you a receipt for tax purposes)
So now that you have them all together, what should you do with them? For the first two categories we went through, I absolutely recommend either putting them in a Safe Deposit Box at a local bank, or putting them into a fireproof box or safe. For the others, file by date and purge appropriately. For example, you don’t need to be holding on to your mortgage documents from 3 houses ago. If you are obsessive compulsive (like my dad), you can set up a long term storage box that lives in your attic with these types of documents. In any case, get them out of the way of your current documents, and make sure you label your long-term boxes by year(s) and document types.
That’s enough for now, I am going to go follow my own advice!