Personal Financial System

Do you have a properly organized system for your personal financial records? If you don’t, you should start one as it is an important part of good money management.
Your financial records and documents provide proofs of ownership of properties, legal matters, business transactions, etc. Credit card statements, insurance policies, invoices, bank statements and other documents form the basis of your financial record keeping. If you have an organized system, you can easily accomplish the following

• Plan and measure financial progress
• Handle all money management tasks (e.g. paying bills promptly)
• Complete yearly tax reports
• Staying on top of your finances

There are normally three places where we keep our financial records namely a home computer, a home file or a safe deposit box. A home file may consist of a cabinet, file folders or boxes. I use all of these options as I find that I can organize better with more storage choices. Below is a long list of financial records that you should be keeping in your home file.

1. Tax records

You will need to keep all related documents such as income statements and receipts for tax-deductible items.

2. Personal and employment records

These includes documents like your birth certificate, education or training certificates, employment letter, resume, etc.

3. Housing records

Housing records may include the sales and purchase agreement, bank statements, lease documents, property tax records, home maintenance receipts, etc.

4. Credit records

Your credit records may consist of monthly statements and receipts.

5. Insurance records

This covers your insurance policies, yearly statements, medical information and claim reports.

6. Investment and Financial Services record

There are a lot to retain here, for example savings statements, bank statements, records of stock or mutual funds, brokerage statements and dividend records.

7. Car and consumer records

The records you want to keep include your car registration, service and repair records, car manual, receipts for appliance purchases, appliance manuals and warranties.

8. Retirement and Estate Planning records

The documents include your Will, pension plan documents, employee provident fund (EPF) statements and trust agreements.

9. Money management records

This last category covers your budget or spending plan, balance sheet, and a list of safe deposit box contents and your list of financial goals.

The above are all the documents you can keep in your home file system. So, what do you keep in your personal computer system and online? Life certainly gets easier when you have a computer at home especially when you need to maintain certain records. Firstly, you can create a computerized version (scan and store) of Wills and personal documents (e.g. birth certificates, marriage certificate, land titles) and estate plans.

You can also prepare account summaries of your investments and keep track of their performances. My favorite activity using the computer is tracking my monthly and yearly expenses as well as net worth. Of course, banking transactions can all be tracked online including your credit card transactions.

Let’s move on to your safe deposit box or fire-proof home safe. Important personal documents like your birth cert, marriage cert and citizenship papers go into the safe. You may also wish to keep your certificates of deposit, mortgage papers, title deed, land titles, automobile title and a copy of your Will.

It is also common to keep valuables such as jewelry or gems, rare coins and other collectibles. Some people also make a list of checking and savings account numbers, financial institutions, serial numbers of expensive items, credit card numbers and credit contacts to be kept inside the safe.

It seems like a lot of work to do but once you actually get started, you will eventually appreciate having an organized system for your finances. No more pulling at your hair looking for a tax-deductible-receipt or the latest life insurance statement. Your life will become much easier at the end.

Jacquelyn is the co-author of the books “Teaching Your Kids About Money” and “Top 93 Personal Finance FAQs in Malaysia” with KC Lau. Jacquelyn is the pseudonym used by Amy Sipagal.