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Although often seen as mundane, establishing and maintaining a secure, organised record-keeping system is key to the effective management of your financial affairs during your lifetime and after your death.
It can save time and money, and reduce the risk of personal squabbles and serious long-term financial losses to yourself and your loved ones.
The initial setting up of a record-keeping system can be time-consuming, but maintaining it can take considerably less time if it is done regularly and systematically. Locating personal and financial records that are not filed properly or at all can take time, and organising them in a way that makes sense and provide easy access can also tax your time and patience. Don’t mind. It will be worth the effort, especially when it matters most.
Your papers are your evidence that you own certain assets, have certain legal claims, are party to certain agreements, have certain obligations, and you are who you say you are. The loss of or damage to any of these may seriously impair your ability to settle financial or other transactions or to replace them. Time is money.
Birth certificates, marriage certificates, passports, identification documents and educational certificates are personal documents. No less important are wills, trusts, land titles, investment certificates, loan agreements, bank documents, insurance contracts and documents showing ownership of assets such as motor vehicles.
The loss of any of these may not only cause great inconvenience, but may cause delay in settling important matters relating to your financial and personal affairs, or even loss.
Maintaining a proper system of record-keeping will help you to track your financial progress more easily, save you anxiety, give you peace of mind, and make it easier for you to cope in an emergency.
As a first step, identify records by type: family, property, financial, legal. These may be divided into sub-groups. Your family records may include, for example, birth, marriage, school and baptismal records as well as wills and passports. File them in an orderly way that makes sense to you and your family members and label your files clearly.
Documents and records should be kept in a secure place. Protect them from water and fire in particular. It is good to keep them at home for easy access.
A good filing cabinet is a good place to start but if cost is a challenge, use a secure metal box. Even a cardboard box covered by plastic is better than nothing, and it is relatively easy to move in an emergency. If you can afford it, a fireproof cabinet is ideal.
If possible, rent a safe deposit bank at a financial institution to secure your most important documents like legal documents and hard-to-replace documents. Make copies of your most important documents and store them at the place of someone you trust.
It is useful to make an inventory of your assets with details such as serial and model numbers, price and place of purchase. Keep evidence of warranties. Keep receipts of your most important purchases.
The system you put you in place will be useful in the event of natural and man-made disasters. Remember that times of disaster are tempting times to those who wish to own what they did not work for. The system will also prove very helpful when you die as it can help to facilitate the life of your loved ones carrying on without major hitches and make settling your estate smoother and quicker.
If possible, take photographs of your most valuable assets. This can prove helpful in the process of recovery in the event of theft or if a claim is to be made from your insurance company.
If you have the facilities, make digital copies of your records and documents. For one thing, you dispense with the paper. Create a master file list of where all your important records are stored and share that information with at least one member of your family.
Make your life easier by going through your files periodically and discarding what you no longer need. First, be sure you will no longer need them.
If in doubt, do not discard them. Remember to ensure that more recent documents are included in your files. To reduce the risk of omitting them, insert them in your files as soon as possible after receiving them.
Nobody is too young to die. Putting your house in order will make it easier to settle your estate, and it can help you to manoeuvre through the maze of issues which arise while you are still alive.
Oran A. Hall, author of Understanding Investments and principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel.finviser.jm@gmail.com
English (US) ·