How To Manage Your Financial Documents In Proper Manner?

Rajat Vinayak is not adept at paperwork, financial or otherwise. He knows he is losing money because he is unable to find the bills he needs to claim official reimbursable expenses. He ends up paying for the maintenance and servicing of new equipment because he can't find the warranty cards and payment receipts.

At the time of filing returns, he finds he has not maintained the records that will allow him to claim deductions. Rajat realises that his poor papermanagement habits are hurting him financially. What can he do to make it easier to deal with papers generated in the normal course?

Rajat needs to do three things to ensure that he handles his paperwork better. He must sort it immediately, keep it updated and dispose of the documents that are not required. This will require a little discipline, but it will go a long way in making his life simpler. The first thing he must do is to make a list of important documents that need to be kept safe. He may have to refer to some of these, such as bank statements, credit card statements, investment records and tax documents, as these will be current in nature.

Rajat should keep separate, properly labelled, files, marked by year, in which be must file his documents. He should also store these in a place where they are easily accessible. Important papers, such as insurance policies, property documents, will and warranty cards, which are active but may not be referred to frequently, must be stored safely. Rajat should also ensure that he informs his wife about where these documents are kept.

Rajat should also earmark a place for keeping his bills through the week and designate a day to sort these. Bills for payment, expenses to be claimed and similar documents should be dealt with immediately. Rajat will find that when he sorts his papers every week, the volume doesn't seem intimidating and is easier to manage.

 Shredding is the third important step that will help Rajat get his paperwork in a manageable shape. Bills, receipts, credit card slips, old investment statements, expired warranty cards, old insurance policies should all be shredded to avoid clutter. Others like bank statements and tax records should be maintained as long as it's legally required.

During the weekly sorting exercise, the papers that don't need to be maintained should be shredded. Once a year, Rajat should review his file of important documents and shred what doesn't need to be kept.

Source: economic times