It's Spring -- Do You Know Where All of Your Documents Are?

You may know what all the papers mean, where they are located and how they are filed, but nobody else does. The importance of a master document is to explain what all of your financial papers are as a guide to an executor of your estate or anyone else that may need access to them someday.

In addition to explaining the filing system you have created, it should also contain all the important financial information not filed away such as online account information, where your safety deposit box key is located and important contact numbers.

Develop a Financial Routine

Much more important than your filing system is getting into a routine of regularly filing your financial papers. Whether that is opening mail a few minutes on a daily basis or placing all financial mail on your desk to open and file once a week, creating a set routine makes it much easier to keep all your financial papers in order and properly filed.

When creating the routine, take the time to coordinate your filing system with other ways you track your finances. If you track your budget using computer software, make sure to input the needed information at the same time that you file the papers.

At the same time, make sure to note due dates for bills and other events on your calendar, personal organizer or electronic assistant. By creating a routine to do all these things at a specific time each day or week, you can organize most of your finances in one step instead of several.

Make the Filing System Flexible and Simple

How you organize your financial papers once you have determined a central location really isn't of importance as long as it makes sense to you. Each person is different, and what works best for one won't necessarily be the best for another. The main point is that it's a system that you understand and will want to use.

You need to be consistent and choose a filing system that you are most comfortable with. There are a number of ways that you can create the system depending on what most appeals to your sense of organization.

While the most common method of filing is by subject or category (dividing financial papers by topic), you can also file papers month by month (placing all the financial papers that you receive each month into separate folders), color-coded (each color represents a category or subject) or by priority (placing papers in the order that they need to be taken care of first). Any of these systems will work.

When you actually make your filing system, make it flexible and simple. If you aren't sure how specific to be when beginning, opt for broad categories. Many people try to make a huge number of specific categories at the beginning and there are so many that it makes it difficult to keep track and the entire filing process becomes overwhelming.

If you find over time that a certain category is too broad, you can easily create sub-categories or an entirely new one as you see which papers you deal with most each month.

Take part of a day during your spring cleaning routine to focus exclusively on your financial papers and you'll be surprised at the rewards you reap.