How to practically organize your Financial Documentation?

Table of Content

4 major areas to organize your Financial Life.
1. Organize all your Financial documents

Insurance Papers
Bank Documents
Investment Papers
Tax Documents
Loan Papers
Monthly Bills
Other important documents

2. Create your Financial Information Vault
3. Use technology for the simplification of your Financial Life
4. Schedule your important Financial tasks
Conclusion

Is your financial life organized? Or, is it scattered all around and you have no idea how to organize your financial life!!

Do you have a proper structure to keep all your Financial Documents such as bank documents, tax documents, insurance papers, loan papers, monthly bills, and so on?

If you are not around with your family tomorrow, in that case, is your family aware of enough financial information?

The smallest carelessness leads to an unorganized financial life, which has its own negative impacts. Before it’s too late let’s learn how can you actually organize your Financial Life.

Are you someone who is constantly perturbed by thoughts such as:

How to organize my financial records?

How to organize my financial documents?

And finally, how to organize my messed up financial life altogether?

In this article, you will learn the 4 areas on how to keep your Financial Life clean and organized.

4 Major Areas to Organize Your Financial Life.

Following are the 4 major areas you need to take care in order to organize your Financial Life:

Organize all your Financial Documents
Create your Financial Information Vault
Use technology for the simplification of your Financial Life
Schedule your important Financial tasks

Now, let us discuss them in detail one by one.

1. Organize all Your Financial documents

Financial documents are not ordinary pieces of paper, your smallest mistake in mishandling may cause you to suffer a huge loss.

You might indeed be keeping them safe but due to your busy schedule, all these documents are unorganized and scattered all over in different places.

Whenever you quickly need to find any essential document, it would take a long time to find the right document at the right time.

Unorganized documents always have a high risk of getting into the wrong hands and once this happens, then ANY kind of loss may happen.

So, before anything terrible happens, let’s commit yourself to keeping all your Financial Documents organized.

Below is the checklist of the Financial document. And, you should keep them organized:

Insurance Papers

Life insurance original document
Life insurance premium payment acknowledgment
Health insurance original policy document
Health Insurance Cards
Health insurance premium payment acknowledgment
Any communication in writing with your insurance agency

Bank Documents

Bank account details
Fixed deposits, recurring deposits documents
Bank Cheques, and record of all the used cheques
Password (ATM or Internet banking) slips
Any cheque deposit acknowledge slip
Locker documents

Investment Papers

Mutual funds document
Stocks related document
PPF passbook
EPF acknowledgment
Demat account papers
Copy of a will
Bonds
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Post office-related investment documents, if any

Tax Documents

Tax return acknowledgments
TDS certificates
Tax-paid acknowledgment forms
Any other document related to taxation

Loan Papers

Title deeds
Home loan agreement
Any written agreement
Car loan papers
Education loan agreement
Insurance papers for a home loan etc.

Monthly Bills

Electricity bill
Phone/DTH bills
Credit card bills
Netflix
Water bill
Internet bills

Also, the Duplicate Xerox copies and the online version will add an additional layer of security.

Once you have created your Big file keep all your original documents. Now you can add an extra layer of security by

Take Xerox copies of all the original files and keep them in a separate duplicate folder.
Get all your original documents properly scanned and save them on your desktop. Also, you can zip all these files, mail them to yourself or your spouse, and STAR them in your email account.

To summarize, this is how you have to organize your financial documents:

i. Main Folder – With all originals (updated anytime a new document enters your financial life).

ii. Duplicate Folder – With all Xerox versions (updated once in a while, preferably once a year).

iii. Online version – A scanned version of all documents, zipped into a file and mailed to yourself and your spouse (updated once in a while, when you update the Xerox versions).

2. Create your Financial Information Vault

Some aspects of the future may be beyond your ability to forecast or influence, but you can still take the required actions to reduce their impact.

Your family mustn’t be completely in the dark about your financial information in case of an emergency, an accident, if you become incompetent, or even if you pass away.

Being uninformed about your finances can seriously compound any issues your family may already be experiencing in the event of an emergency.

Have you created a Financial Information Vault accessible to your family in your absence?

Financial Information Vault is basically a ‘Black Box’, or editable PDF document where you write all the essential Financial information useful for you to track all information in one place.

And, in your absence, your family can have access to this information, without any confusion or panic!

What if they need to call a life insurance agent or want to know the investment details or any other emergency need that might happen?

If you are the sole breadwinner of your family, it is your responsibility to make the essential financial information available to your family, without any hassle.

Okay, I agree with everything you have said above.

But, I don’t know what information to be included in an Information Vault and I don’t have the time to design one.

Did we catch your thoughts?

Here is the Good News. You don’t need to!

We have designed an editable PDF, which you can keep saved on your computer by keeping all the financial information updated, from time to time.

Also, you can take its print-out and write all the details manually and keep it safe in your locker.

Information Vault consists of all the essential information given below:

All the contact information that your family might require.

Such as the Contact Number of the Financial Planner, Life Insurance Agent, Health Insurance agent, or CA.

All the details and locations where your important documents are stored and their numbers

Such as Aadhar Card, PAN Card, Passport, Locker keys, etc.

Details of all the assets

Such as personal property, investments, or bank details

Your second step in organizing your Financial Life is to create this information vault or a black box of your financial details.

Creating this information vault has many advantages and is useful in various cases:

Case 1: Your unfortunate death

Case 2: You are critically injured and cannot communicate

Case 3: The emergency situation when your family quickly needs information

Case 4: When you urgently need various information

Keep Your Information Vault Safe!

Your second action step is to keep this financial Information Vault safe in your locker, and saved in your computer, in case of any emergency need for you and your family.

Making such a list and transferring the Information Vault to the appropriate party are both crucial steps. All of the work that went into compiling this list will be misused or lost, if it is not with the right person and for the right cause.

The created Information Vault can be kept for personal use or given to a dependable relative or acquaintance. It’s crucial to talk about and confide in at least one trusted family member or friend regarding the knowledge.

Another choice is to give it to a dependable outsider, such as an accountant or an attorney. Additionally, a copy of the list can be stored safely away.

Watch the video to learn more about the Information Vault!

3. Use technology for the simplification of your Financial Life

Technology can reduce many complications.

There was a time, when there was less technology in the banking sector, and people had to stand in queues for all their basic banking needs such as deposits, withdrawals, investments in PPF, etc.

Do you still want to experience age-old techniques of visiting your bank or insurance office for your general needs?

It consumes a lot of time, efforts and it’s a complicated process. Any such complication ends up with an unnecessary hassle, which in turn causes an unorganized financial life.

Make use of technology as much as possible. It is hassle-free and it can simplify your financial life in a BIG way.

Below are some essential tasks that you can do online

Connect your PPF account with net banking for online payment

In earlier days, people visited their bank branches or relied on their agents to deposit money into their PPF Accounts.

Now you can connect your PPF account with your bank and make online payments just like you make payments to any other bank account.

Once your PPF Account is connected with your bank, all future payments will be automatic, it’s just a one-time process you need to do.

Connect your loan accounts with Net Banking for online payment

Just like a PPF account, your loan account can also be linked with your bank. This way you can prepay your loans anytime you want. All you need to do is- just use your loan account as the bank account and use it for NEFT transfer, You need an IFSC code because that’s required for an NEFT transaction.

This way your loan payment can be automated.

Set up your payment reminders

There are some essential payments such as payment for your internet, credit card, DTH or Mobile recharge, Netflix, life insurance premiums, and so on. It would be hectic if you keep a record of their payment dates, there are higher chances of missing the deadline.

The solution is to generate auto-pay wherever possible and set up payment reminders for all your monthly payments. For Credit Card Payments you can use CRED App, for smooth transactions and notification of the due dates for all your Credit cards.

For other payments, you can simply do it on your Mobile or Google Calendar or their respective websites. Certain wallets like PayTM automatically send payment reminders on various services.

4. Schedule your important Financial tasks

In your busy schedule, it is normal that the essential financial tasks just get ignored or forgotten in your mind. For example, you have just transferred to a new city in your job; now you need to do many tasks such as address update in all your financial documents, credit cards or debit cards, phone number update, EPF Account transfer, and so on.

If it is not done, you may face extreme challenges or losses in the future. Let us say, that your old address is occupied by somebody else and you are still receiving all your essential financial documents at that address, they may reach the wrong hands and it will be a high risk of misuse of your information.

So, schedule all your essential Financial Tasks before it’s too late.

This is how you can do it:

Get your Employee Provident Fund withdrawn or transferred

When you change a job, your EPF needs to be transferred to the new employer, or you can withdraw it.

For some people, it has been years and they are wondering what the exact status of their EPF accounts is.

In case you are waiting for your EPF transfer or withdrawal and cannot find out what to do next, you will be happy to know that the EPFO department comes under RTI regulations. And you can file an RTI query asking the EPFO office about the status of your application, you can ask them how much more time it will take.

Keep all the important information up to date in all your investments

There are various kinds of things that keep changing in our lives, like address, phone number, and name after marriage (in the case of women). We also want to change the nominations in our investments. These things look very small but are very important.

You should list down each product, bank account, insurance policy, etc. you have, and just make a note of all the information you have given to them, and match it with current information. If you find any discrepancies, just update them. In most cases, it should be possible with an email.

Read all your policy documents of your Financial product

Very few people read policy documents and terms and conditions booklet that they get after buying a financial product such as Term Insurance.

Also, it is a good practice to be updated with their rules through their websites or social media channels.

Conclusion

We cannot emphasize enough the importance of organized Financial documents. An organized Financial Life can bring enormous peace. We hope that you have realized every bit of its importance in this article.

Even if you have recently started your career and don’t have more financial documents with you right now, still you should start practicing this standard organization technique now and you will thank yourself later.

If you have any queries or experiences to share, feel free to drop them in the comment below.

All the information is presented in simple actionable steps. So, don’t forget to take these action steps right away.

We will help you to create a financial plan personalized to your needs, Click the link below and register for your FREE Financial Planning Consultation Call.

How to Practically Organize Your Financial Documentation?

Table of Content

4 Major Areas to Organize Your Financial Life.