A home inventory system is the next (and last) step. If you have completed the process described in steps 1 through 4, then it is time for you to create a system to document, organize and maintain all this information.
What is a Home Inventory System?
You may be asking why you need a “system?” And you may wonder “what is the difference between having all the information and having a system?” Excellent questions and let’s examine the answers.
First of all having all your information gathered in one place is not a system. Why? Because there is no order to the way the information is maintained.
So assuming you have everything gathered about all your personal property and the information is currently residing in a big box, what good does that do you? Well, I admit, at least you have it in one spot. But if I asked you right now to tell me all the details about your new flat screen TV what is the first thing you do. Right! You start pawing through the piles of paper to find the few pieces that relate to the TV. Wouldn’t it be easier to have it all documented, organized and in one place? Now that is a system!
And a home inventory system will make you more secure and help you manage your life.
Systems are necessary not only for you to be able to find information quickly but in other circumstances as well. Let’s say you live on the west coast of Florida and you learn a Cat 3 hurricane will be at your front door in 24 hours (yes, I am describing my circumstances).
Or, let’s say you live in the California hills and there is a fire approaching. Or maybe you are in Kansas and tornadoes can pop up very quickly.
What will make your recovery faster?
Having the details of what you had will make things go a lot easier and quickly. Believe me, been there!
Or let’s say that you decide to take a nice weekend with your spouse to celebrate your anniversary. BAM! Along comes the semi-truck with your name on it and both of you are killed. I know this is unpleasant to think about and it always happens to the other guys, right? No, it could happen to you very easily. Sorry, that’s life!
But what would happen if suddenly you were gone? How would your heirs know what is what, how much it is worth, and if they have managed to handle it all? They won’t unless you give them a system that documents everything.
Okay, so now we know we need a home inventory system. How in the world do we start this?
I will walk you through this step by step. By the end of this final step you will have full documentation that is easy to access for anyone who may need it.
If you have completed the process described in Steps 1 through 4 then you currently have pages and pages of documentation of all your personal property.
You have looked up the costs, tracked down the receipts, recorded serial numbers, dates of purchase, model numbers, and have tracked down all the details to include appraisals if needed.
The next step is to decide what the best type of home inventory system is for you. There are really several factors you need to consider before deciding this. Review these parameters before you make a decision:
Let’s assume you decided on an electronic system as your best choice. Here is the main process I would suggest for putting that system together. If you prefer a manual system, it is described a little further down.
An electronic system should be constructed so that everything is kept on the computer. You do not have need for the original paperwork. Most times I suggest you destroy the original paperwork to save yourself the hassle the maintaining it. One caution, if something requires an original make sure you keep it. Very few contracts these days require an original but be careful with this. File the originals with your home filing system that you created.
Start at your Documents Library.
Open a folder called Home Inventory System.
Then open files for each category of property. So within your home inventory system folder you will have folders for appliances, clothing, collector’s items, electronics, etc. Within each of the individual folders you will have files for your individual items. So for example you may have a file for refrigerator in the appliance folder, a file for Hummel’s in the collector’s items folder, etc. Next you will want to take the information for each item and scan the appropriate paperwork (purchase receipt, service contract, etc.) and store the PDF in that file. So for your refrigerator file you will scan the original purchase receipt, maybe the service contract, record the serial number, make and model on a piece of paper and scan that. Documentation such as owner’s manuals, installation instructions etc. can generally be found on the internet. However, if you want to keep them they will have to be stored separately.
You also have another option for how you file this. You can set up your home inventory system folder by room. So you would have a folder for the Master Bedroom, and then all the files that apply to that area. No matter which way you decide to go with the individual files, be sure to attach a photograph to each.
If you are more comfortable with keeping a manual system it is very much the same as the electronic system except it is stored differently.
You will need a binder of some sort that will be the Home Inventory System. You could use a three ring binder, or an expandable folder, or you can use a file drawer with different files for each item. It depends on how much you have in personal inventory.
You will go about building the system much the same way as in the electronic system. Divide your binder into different sections that will represent the type of item. For example you will have a section for appliances. Within each section you will have a file for the item, such as in the appliances section you will have a file for the refrigerator.
Whether you decide to use an electronic system or a manual system you will want to complete a master file that notes all items that are included in the home inventory system. I would add up the values of each category/room (depending on which way you organize it) and record that amount on the master file. This ties everything together nicely.
If you use Excel, or some other inventory spreadsheet program, or you decide to use a manual system, you can set up a file just like the Excel file on a 13 column accountants pad.
Even with the best home security in place, significant losses such as fire and theft can occur. Having an up-to-date home inventory will help you get your insurance claim settled faster and save you a lot of time and headaches. A home inventory system will also help you purchase the correct amount of insurance and not what your insurance agent think you should buy.
If you or your parents are getting ready to do some estate planning a home inventory system can assure that the estate will be properly addressed and all items and possibilities covered. In addition, if there is a estate to be settled, a home inventory system can make that much easier. Maintaining a Home Inventory system may not seem like a very hard thing to do. Unfortunately many people spend hours getting this done and within a year they are behind keeping up the records and frustrated.
Let me help you with a quick system that will make the updates easy.
First of all, is there a limit on what you include in the inventory? For some people anything they buy that is less than a preset amount is not included in the inventory. In other words if you buy a universal remote control for $25.00 it would not be included in the inventory. However, if you buy a MP3 player for $75.00 it would.
Decide if this is your policy, or does everything get included?
Next, set up an area that all paperwork regarding new purchases will go. You could even set up a file in your home filing system that would be labeled “new purchases”.
Every time you buy something, paperclip all the information on it together and put it in this file.
On a regular scheduled basis, sit down and make files, scan, and put the paperwork in the proper order. This can be once a year, depending on how much “stuff” you buy.
Most people find that updating everything is best to do during the time that all your paperwork is out for your tax preparation.
The key is keeping all the paperwork together. Then it is simple to keep the files updated.