Tame the Clutter: Organization is the Key to Sanity
Before joining the forces of the self-employed, I previously worked as a paralegal. The firm I worked for dealt with Life Care Planning (aka estate planning). When we asked clients to bring their financial documents with them to the next meeting, they came in with literally boxes upon boxes of paperwork, some of it relevant, most of it not. One of my jobs was to wade through the piles and pick out those choice items that were actually relevant, make copies, and then create a Life Care Binder for them.
Since then, my own financial and estate documents are more clean and organized than a high-class stationary store. Each binder has a main label on it as well as an additional label with subheadings. That way when I get ready to file or check on something, I know where it is at a glance. More importantly, however, if something happened to me, so would my husband (or other family member).
My Personal Experience
Although most of the clients I dealt with as a paralegal had a collage of important documents, I never realized how many people were living with the same problem, until disaster struck. When my father-in-law passed away he had papers everywhere. They were in his office, in drawers in the kitchen, on top of the fridge, in some of the sheds, under his bed. They were everywhere.
We had no idea if he had investments, if he owed anyone money, if he had any money left, or whether he even had life insurance. Nothing. There was no hint, and if he had a system of organization, it existed only in his head.
It took me—and remember, I had done this many times before for clients—a full month to go through all of his papers. I dedicated four hours every night to delving into all of the documents and just picking out the “could-be” assets, liabilities, finance, tax, and estate planning documents.
Those countless assets, liabilities, finances, taxes and legal wishes are the documents that someone will have to find and go through if you fail to organize now. Let me tell you from experience, my own as well as that of countless clients, the worst possible time to have to go through such a time-exhaustive task is when you are grieving.
Tips for Organization
So, to help you organize, I’m going to take some time to share with you some organizing tips and tricks that I shared with clients when I worked as a paralegal:
- Finance documents are a lot like laundry. It’s a never-ending process, so if you don’t come up with a system that works for you (whether you’re a stacker, a tosser, or a boxer), things will begin to pile up and become overwhelming quickly.
- It’s best to have a system that allows you to collect the documents as they come in the mail, and then deal with them only once a week. That way they never get beyond control, but on the same token, you don’t have to mess with them so frequently that you get burned out.
- Once you can tame that clutter, you can rest assured that your finances and business necessities will be organized, and you can save your family from the headaches and heartaches of straightening your financial affairs after your passing.
Do you have suggestions or tips that work when it comes to organizing your home office and documents? Let us know in the comments section below.
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MoneyCone wrote:
Tue, 04/12/2011 - 11:28 Comment #: 1I have a simple folder system to tame the paper tiger. I need to get this in place for the docs that live on my computer now that most documents are sent electronically.
Ravi Gupta wrote:
Tue, 04/12/2011 - 12:52 Comment #: 2I don't have many important documents but I keep contracts and paperwork from banks in a filing folder. Other than that I don't have much in terms of financial paperwork but one day when it starts pouring in it will all go into that one folder.
-Ravi Gupta
Ian Brennan wrote:
Tue, 04/12/2011 - 16:32 Comment #: 3I was just talking to a friend about business expenses. He told me he collects each month's receipts in a separate envelope. When I asked him if he wrote anything on the outside of the envelope, I just got a blank look. I told him I write the amount and the type of expense on the outside of the envelope when I deposit the receipt. It only takes a second or two. That way I don't even have to go through the various receipts at tax time. He seemed to think it was a good idea.
Jessica Schmeidler wrote:
Tue, 04/12/2011 - 20:01 Comment #: 4Great ideas so far. Keep them coming. :)
Tara wrote:
Tue, 04/12/2011 - 23:34 Comment #: 5I know I am pretty terrible at organizing my paper financial documents, but that's because so few of them come in paper form these days that it's harder to come up with a good system.
As for my estate planning, a copy of my will is in my parents' safe, where their will is. They are the executor, so I thought that made sense. I also provided them with a list of all of my bank account numbers, approximately values at the time of writing, and a list of all of the beneficiaries not named in my will, i.e. on retirement accounts and life insurance, plus the life insurance policy number and its value. I plan on updating that document once per year.
I would almost say that a single page document containing all bank account numbers and approximate balances at the time of writing is more useful than all of the old statements.
(I am in my early twenties, so I'd say it's fairly normal to have one of my parents be the executor of my will. And it goes without saying that if one or both of them die, I would re-write my will.)
Jessica Schmeidler wrote:
Wed, 04/13/2011 - 15:49 Comment #: 6Tara, it's great that you already have so much of your financial house in order while only in your early twenties. :)