Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
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Sean, one of my intrusive 3 a.m. thoughts is whether I've told my beneficiaries where my estate planning documents are. And when I last saw my birth certificates as well. Am I alone in this?
Definitely not. I sometimes have panicked thoughts about what's going to happen if I die some horrible sudden death and no one knows where any of my stuff is.
What a downer, but I'm going to pick it back up. I think it's a good time for us to discuss document management so I can make room for other intrusive 3 a.m. thoughts.
Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Ayola. This episode, we're answering more of your questions about taxes ahead of the April 15th filing deadline. But before we sway that way, let's talk about managing important financial documents, which is also relevant when it comes to taxes.
I never thought I'd see the day where we'd be ready to nerd out about documents, but it is an important topic, so here we are.
Ha. So, Sean, how do you store your documents? What are you going to do with your tax documents, Sean? Yes, I'm all in your business.
Okay, well, this is where I confess that my document management is one of my biggest financial and adult blind spots. I'm embarrassed to admit that I have been keeping my documents in my nightstand for many years now, all mixed up with books I've been meaning to read and old headphones and whatever else accumulates in there. And let me tell you, it is not a good look for a CFP.
Well, this is a no-shame zone, and that means this episode is for you, Sean. But I will say at least they're not being stored on the kitchen counter and being decorated with food stains. That may or may not be a personal story. So I keep most of my documents inside of a folder tucked away somewhere in my garage and somewhere in my bedroom wardrobe in another folder and somewhere in my email. So this makes the timely segue into the right way to store your documents.
Okay, Elizabeth, I think it's good for us to outline what types of documents we're talking about to start with. My assumption is you're referring to all financial documents, right? Like tax returns, bank statements, birth and marriage certificates.
You are correct. I'm referring to those and essentially any document that could impact your financial life. You want to think carefully about how you store legal identification documents, tax documents, financial records, and also estate planning documents. Things like tax returns, investment statements, bank statements, pay stubs, card titles, property deeds, insurance policies, and social security cards could fall under those categories. But I know I mentioned a lot.
Pretty much everything you could imagine.
Exactly.
So Elizabeth, what suggestions do you have for a better way to organize my files in their current situation, which is a mixed up mess?
Well, you have a few options here. If you don't want to turn looking for important documents into a scavenger hunt, you can put hard copies of your documents into labeled folders and then house them in a file box, cabinet, drawer, or a wardrobe.
Learning how to store documents also seems to be a process of learning where you shouldn't be storing them. And a big part of this is finding secure places to keep documents. What are the safest options that folks have?
Ideally, you'll keep them in a safe and dry place. I once left my documents in a humid closet, and I bet you can guess what happened to them. Another free tip, if you have young kids, keep the location out of their reach. Some of my important documents have turned into coloring books for my son over the years. For people who want an added layer of security, consider a fire-resistant file cabinet or a safe. And another option is a safe deposit box at a local bank. You probably don't want to put documents you'll need frequently in there because, of course, banks are usually closed evenings, holidays, and weekends.
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