The Basics of Organizing Your Financial Records

Mar 6, 2020 3 min read

The keys to stress-free financial record maintenance are having a plan, a place and the motivation to stay on top of the organization. While the initial setup may be time-consuming, you will thank yourself for it later when finding the document you need is quick and easy.

What should I keep?

If you tend to keep stuff because you "might need it someday," your desk or home office is probably overflowing with unimportant documents. One of the first steps in determining what records to keep is to ask yourself, "Why do I need to keep this?" Documents you should keep are those you need to use for an upcoming purpose (like taxes, purchasing a home, or filing a FAFSA) or those that would be difficult to replace (like legal contracts, insurance claims, and proof of identity). If you have documents that you can access online, such as banking statements, you do not need to keep paper files.   

How long should I keep it?

A general rule of thumb is to keep financial records and documents only as long as necessary. For example, keep ATM and credit-card receipts until you've reconciled them with your statement then destroy them. Here are some general recommendations, though your personal circumstances may impact how long you keep documents. 

Records to keep for one year or less:

• Bank or credit union statements

• Credit-card statements

• Utility bills

Auto and homeowners insurance policies

Records to keep for more than a year:

• Tax returns and supporting documentation

• Mortgage contracts

• Property appraisals

• Annual retirement and investment statements

• Receipts for major purchases and home improvements

Records to keep indefinitely:

• Birth, death, and marriage certificates

• Adoption records

• Citizenship and military discharge papers

• Social Security card

Some financial records may have more specific timetables. For example, the IRS recommends you keep federal tax returns and supporting documents for at least three years (and up to seven years).

An easy way to prevent paperwork from piling up is to remember the phrase "out with the old, in with the new." For example, when you receive this year's auto insurance policy, get rid of the one from last year. When you receive your annual investment statement, you can destroy the monthly or quarterly statements. You should review your files at least once a year to keep your filing system organized.

When you are ready to get rid of documents, don't just throw them in the garbage. To protect sensitive information, you should shred everything that contains Social Security numbers, account numbers, or other personal information.

Where should I keep it?

There are a variety of options available for storing and organizing personal information, such as folders, organizers, and file drawers. More important documents should be kept in a fire-resistant file cabinet, safe, or safe-deposit box. 

You might also consider electronic storage for some of your documents, especially if space is limited. In addition to files on your computer, you'll want to keep backup copies on a portable storage device or utilize a cloud storage service. This can also help ensure that important information is accessible in the event of an emergency, such as a flood, tornado, or fire.

Wherever you keep your files, it is helpful to organize and store them according to specific categories (like banking or insurance) so that you can easily find what you’re looking for. Another option for organizing your records is to create a personal document locator - a detailed list of where you can find important information. This list is helpful in locating documents and can also assist your loved ones in the event of an emergency. Typically, a personal document locator will include personal information, a list of specific locations of important documents, important contacts (attorney, tax preparer, financial advisor), and online accounts with username and passwords.

If you have questions about your investments, tax liability or financial plan as you sort through your documents, contact a Farm Bureau financial advisor. We’re here to help as you plan for your future.


From materials prepared by Broadridge Investor Communication Solutions, Inc. 

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

Neither the Company nor its agents or advisors give tax, accounting or legal advice. Consult your professional advisor in these areas.

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