It is well known that a vital aspect of successful financial management is record-keeping. An effective record-keeping system should be convenient to use and not too complicated to maintain.

Financial records have become a vital part of life. These financial records are: 1) key to your credit score, 2) helpful in saving money on taxes, and 3) a continuing indication of your financial progress. If you have a systematic plan for keeping track of important papers you can save hours of anxious searching, help preserve peace and harmony, and make it easier to cope with emergency situations.

Record-keeping is also important due to legal and safety factors. Many records and papers can be kept in a home file for ready access, while others should be left with your attorney; placed in a safe-deposit box; or put in a fireproof, waterproof, and burglar-proof home safe. A good rule to follow is to keep the item at home unless it is a legal document or is difficult to replace or duplicate. Financial records should be kept in a safe-deposit box or possibly left with your attorney. Through recent hardships such as Hurricane Katrina, many people have explored the idea of sending copies of very important documents to a trusted relative in another state, and also having copies in a fireproof or waterproof file that could be lifted at a moment's notice.

A number of recordkeeping systems are available commercially, or you can design your own (e.g., with file folders). It is important that the system makes sense to you and that you use it consistently.

Top Ten Ways to Track Spending

1.Keep all sales receipts and create notes to record payments made without receipts. Drop them into a coffee can or plastic jar or a space designated for receipts. Each time you get a paycheck, tally your spending. Then sort receipts and notes by expense category. Then regularly total amounts of what has been spent in a category to determine how much is needed in that category each week or whether spending could or should be reduced.

2.Keep an account book by expense categories.

3.Use envelopes or folders for each category of expenses with an amount of money allocated for expenses for a set period of time, like a month. Record dollar amounts on the outside of the envelope or folder.

4..Pay all bills by check and keep running tallies of how much is left in the allocation for each category. This makes a record system in the checkbook. If it often seems that only particular categories of expenses are the problem, you could monitor only the categories that cause the problems.

5."Sticky notes" can be posted on credit cards with a notation of the maximum amounts that can be charged on that card. Subtract amounts of expenditures added to the card as you make purchases.

6.An informal method used by some people is the checkbook balance, as a guide to patterns of expenses. If the balance drops below a particular amount, it is an alert to potential problems.

7.Use a budget partner for problems that seem to be spending addictions. Establish a household rule that the expense has to be verbally justified to the budget partner before any expenditure on those items can be made. The budget partner's role is to ask questions to bring greater understanding of consequences of any expenditure rather than telling the person what to do.

8.Keep a log of "financial emergencies" for a few weeks to determine what they are, what triggers them, and then think of ways to avoid them.

9.Purchase inexpensive computer software designed for electronic record keeping. Be sure to back up your records frequently.

10.Carry a small notepad in your purse, car or pocket to jot down spending.

Source: Money 2020, A Dozen Ways to Track Spending

Filing and Storing Important Papers

Plan and evaluate which papers should be stored, where they should be stored, and which should be discarded. Make the decision and file each paper accordingly. Do not just stack papers and plan to return to them later. This is the way things become lost and cause you to waste valuable time in searching for or replacing them.

A home filing system with a space provided for the important things is the key to managing your important family papers. For items kept at home it is not necessary to have fancy filing cabinets or special “offices.” A “business corner” can be set up in any room in the house. A cardboard drawer or metal box can serve adequately for storage of bills and family papers. Filing systems must be planned to meet your needs. You may not need detailed files at the present time. But remember, every type of important paper should be assigned a certain space, kept there until needed, and discarded if no longer useful.

Permanent and Semi-Permanent Records

Keep in a safe deposit box or a fireproof, waterproof, burglar-proof home safe—with a list of the contents of the box in your home file.  

Ohio State University (OSU) Extension has various recordkeeping forms, “Know Your Valuable Papers, What and Where?” available at this website, http://ohioline.osu.edu/pdf/l237.pdf  Another OSU Extension resource that helps us to know how long to keep family records such as personal property, financial, and legal records, can be viewed at http://ohioline.osu.edu/mm-fact/0008.html

Author:   

Susan S. Shockey, Ph.D., CFCS
Ohio State University Extension, Family and Consumer Sciences Extension Educator, OSU Associate Professor                                                                        
shockey.3@osu.edu

This article was originally published on yourmoneynowonline.org the financial education website of the Ohio Treasurer’s Office – Treasurer Richard Cordray”.