Now you can start to organize files and sort them into some categories. Not sure where things would go?
Here is a downloadable list to help you organize files. This is a list of the home filing categories and the documents that would be included in each category. The list is in PDF format so be sure you have a copy of Adobe reader in order to open it and use it.
Starting to organize begins with separating your paperwork into different piles depending on the category. You will end up with four piles of paperwork: one for personal records, one for all your assets, one for all your liabilities, and the last one for all your insurance information.
This is the basics of your home filing system.
To organize files you will need to focus on them. In order to get them in the proper category make sure you really look at what the document is about and who it is from.
Most of the files will be easy to identify. For instance, it is hard not to recognize a birth certificate. However, an annuity could be an asset (investment) or insurance (as in life).
When you organize files you may need to think about the intent of the document. Would you file the annuity as an asset or insurance? That will depend on how it is used. Either could be the right answer. It will depend on you and your needs.
The main objective is that each document find a place in the system that will be recorded. Then whenever you need the document you will know where it is.
No two systems will be exact, and what works for you may not for someone else. There is no right or wrong.
If you have a lot of paperwork then you might want to consider getting four boxes to organize and hold the files. Each box will be labeled with one of the four categories of documents.
As you pick up a piece of paper from the pile you have accumulated, you can determine what type of file it is and which box it will go into.
In the next step where you create the system, having a box holding all one type of documents will help.
If you are not sure where piece of paper fits, look at the definitions in the personal finance 101 section.
Or you can look at the list of files you downloaded. If you get it wrong it’s okay. Later in the process we will make sure that a trail will lead to the information if you ever need to recover it or if anyone else needs it.
At the end of this step you should have four piles (or four boxes) will all your documents in them separated by category. Next we will create the system.