Each family regardless of its size needs a filing system for family papers and records. Some ideas are listed below to help you handle your family financial and business affairs.
Family Business Center
Organize a specific place to use as your family finance center. It might be a desk in the kitchen, extra bedroom, or living room. This desk, coupled with an adequate file cabinet, should serve for your "active" files. Then you can have "dead" file storage anywhere in the house. In your family finance center be sure to have space to work and space to store all the things you need to manage finances; the budget book, checks (both canceled and unused), current receipts, "active" files, a calculator, adding machine, or computer with financial management software, pencils, paper, envelopes and stamps.
Handling the Money Matters
Don't worry about who should take charge of the finance center or money matters. It should be the person who has the time and temperament to take care of the details that every family's finances require. You, your spouse and even the older children may share the work involved. Just be sure everyone knows what his or her responsibilities are, how your filing system works, and how your system of financial control operates.
As dull as it can seem routine is important when it comes to handling financial matters. You don't have to do your bookkeeping every night of the week, but you do need to agree on some basic patterns of operation and then work together to follow them.
Timing
As an example, whoever gets the mail should know that all bills and other financial mail goes directly to your finance center, even if the business isn't taken care of until later. That way important mail doesn't get lost in the clutter on the dining room table or hall chest -- wherever the mail usually gets dropped in your home.
Try to follow a regular schedule for taking care of family financial matters. Set up a regular time when you balance the checkbook, fill in the family living expense account book or computer program, and pay bills. This can be at just one time during the month or several times -- you decide.
Agree on a regular monthly session when you go over financial matters in general. That's when you may decide to discuss major buying plans, vacations, and other financial matters the entire family should know about.
Purpose of Home Files
Your home files serve three purposes:
- To help you manage daily family financial matters;
- To make records and business papers readily available;
- And to keep older records out of your way so you have a more effective finance center for your family.
The following are suggested file folders for you to have in your "active" file as your finance center: (You may not need all of them or you may want to add some to this system. Whatever works best for you -- that's why you have a filing system in the first place -- so it will work for you.)
Active Files
PAPERS TO FILE -- a place to put papers (except bills) as soon as they come in. This helps keep them from getting lost or misplaced. Just be sure you empty this folder at least once a month by moving the papers to their proper folder in the rest of the filing system.
BILLS TO BE PAID -- this is the one exception for papers as they come in. Put incoming bills in this folder. That way you can check often to see what needs to be paid. After they are paid mark "paid" and put into the "papers to be filed" folder if you don't take the time to file bills when they are paid. You may want to keep the above files at the beginning of the system so they are handy. The remaining files can be kept in alphabetical order.
BUDGET -- a copy of your current budget. Include with your budget, your record sheets of recording expenditures. If you use a computer program, you may want a printout of data in this file.
CHECKBOOK -- put your household checkbook and unused checks in this folder.
CHECK ACCOUNT -- here's the place for your canceled checks and past bank statements. Keep those canceled checks here until you refile them for tax purposes or for proof of such things as home improvements or investments.
CLOTHING -- keep all important care tags from clothing you purchase if the tag is not permanently affixed to the item. Keep purchase receipts until you are sure the item performs as expected, at least until after first laundry.
CREDIT CARDS AND CHARGE ACCOUNTS -- keep a list of your charge account numbers (a copy of this list should be in your safe deposit box), paid bills, and the phone numbers or addresses to contact if a card is lost.
EDUCATION RECORDS -- a list of who attended where, when graduated, degree or certificates awarded, etc.
EMPLOYMENT RECORDS -- paycheck stubs, resumes, a list of who worked where, when, immediate supervisor's name, address, pay rates, etc.
EQUIPMENT AND FURNISHINGS -- information about equipment and furnishings in the home, instruction books, warranties, sales slips for those items with still-valid warranties.
FINANCIAL PLANNING -- past budgets, a list of goal statements, new worth statements, household inventory, and notes to yourself through the year as you think of things to be considered when you do your annual financial planning.
HEALTH RECORDS -- record of immunizations, medical car, name of family doctor, his phone number, blood type, allergies, etc.
HOME -- evidence of home repairs and improvement such as receipts, contracts, and canceled checks, home ownership papers or your copy of the lease if you're a renter.
HOUSEHOLD MANAGEMENT -- a catchall file for information about food purchases, cleaning supplies, pest control, yard equipment, etc.
HOUSEHOLD MANAGEMENT (UTILITIES) -- paid utility bills to be used when figuring a new budget, other information relating to household utilities.
INSURANCE (CARS AND OTHER VEHICLES) -- copies or originals of insurance policy, with name and address of agent, record of claims filed and paid, a place to keep track of traffic violations and accidents.
INSURANCE (HEALTH) -- a copy of original of insurance policy with name and address of agent, and record of claims filed and paid.
INSURANCE (HOUSEHOLD) -- a copy or original of insurance policy with name and address of agent, and record of claims filed and paid.
INSURANCE (LIFE) - a copy or original of insurance policy with name and address of agent, and record of claims filed and paid.
ADD folders for insurance of other types that you have.
LOAN -- copies of outstanding loan agreements including personal and installment loans (put mortgage information here or in "HOME" file).
MAGAZINE -- name, cost, and expiration date of magazines and newspapers to which you subscribe.
MEMBERSHIPS -- Information about memberships in the various organizations to which you belong.
PROFESSIONAL -- information about business or professional activities.
RETIREMENT AND PENSION PLANS -- company retirement plans, personal retirement plans (Individual Retirement Accounts or Keogh) annuities, social security, etc.
SAFE DEPOSIT BOX -- a list of the items you have in your safe deposit box. Location of box and rental agreement.
SAVINGS AND INVESTMENTS -- savings account passbook, records of savings, certificates, information about stock and bond certificated, mutual fund shares, U.S. savings bonds, real estate and other investments (the actual certificates should be in your safe deposit box), the name, address and phone number of your broker.
TAXES -- income tax returns for the immediate past three years (put older returns in dead storage), property tax records for potential income tax deductions (may be broken into sub files such as TAXES -- MEDICAL; TAXES -- CONTRIBUTIONS; TAXES -- MOVING; etc.
Dead Files
Move papers out of "active" files and into " dead" storage (or toss) as soon as possible. At least once each year, go through your entire active filing system. Your "dead" storage files may be just a simple box or two in the attic or garage. These files hold papers you may just need someday in the future.
Your TAXES file in "dead" storage will include detailed records such as canceled checks, diaries, and what ever else backs up your return for at least five years, preferably 10 years. Then keep copies of all tax returns indefinitely with W-2 forms stapled to them.
Other file folder titles in "dead" storage might include, Home INVESTMENT, LOANS, PERSONAL PAPERS, and REAL ESTATE. For more information see "Create your own business center."
