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Putting a Method To the Madness

Disorganized financial records get in the way of personal prosperity, say the Martins, who are both certified financial planners.

"Not having your information organized creates a lot of financial pressure," Mary Martin said in an interview. "It can also cost you a lot of money."

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For example, Martin said many people fail to claim certain tax deductions because they don't have the receipts to remind them.

When you have a standardized filing system you have less stress, she said.

I certainly can attest to that.

Even if you use home accounting software, Martin said, you still should have a filing system to store your paper receipts, warranties, tax records, bank statements and other essential documents.

The couple has created a 44-page handbook that walks you through setting up and maintaining your files.

"Just the simple act of putting something away requires a complex decision process," the Martins write in the handbook. "That's why warranties and medical receipts and bank statements often wound up in a stack on the closet floor, or on the hutch shelf or in the infamous 'kitchen drawer.' " The Homefile financial planning kit is largely made up of 22 preprinted file divider cards that drop into hanging files or manila folders. Each divider card has a Mylar tab at the top naming a category. Each card instructs you on which papers to keep in that folder, along with helpful tips, including how long to keep certain papers, usually depending on the regulations established by the Internal Revenue Service.

For example, the file divider for bank accounts says checks may be disposed of after one year provided they aren't needed for tax purposes. Cash withdrawal or ATM slips can be trashed after the transactions appear correctly on your monthly bank statement, the couple advises.

What I found most useful in the kit was the quick-find index. The index lists in alphabetical order more than 200 documents people need to keep track of. (I'm not kidding.) For each of these items, the index tells you where to file it.


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