Chapter 2. Collect financial information

 

After setting your SMART goals, you need to collect and organize your financial information to help you save time while searching for documents so that you do not miss payment deadlines. 

Below is a list of what is needed by most individuals to complete this process, some could be paper documents, others could be electronic/digital.  

How to

It is helpful if you could designate a personal financial space to conduct all of your financial decisions. A designated computer/cloud file area is a good place to start. You may also want to invest in a fireproof safe-deposit box and a shredder to keep and safely dispose of important, permanent documents such as insurance policy documents, deeds for real estate, car titles, birth certificates, passports, marriage/divorce papers, and last but not least Social Security Cards safe.

 

 

Another great idea to help you organize your financial documents is to create a personal financial directory. This could be as simple as creating a list of all your financial accounts using a secure document that is on your computer and protected by a username and a password.  Since most financial transactions are done electronically, you should always use a secure wired/wireless internet connection. 

When using mobile banking, investing, and/or credit card apps, make sure the apps are trusted, authentic, and safe; use two-factor authentication where possible; use strong and unique passwords that you change regularly;  and finally, make sure you have a strong lock-screen pattern on your mobile device. Whatever method you use, be diligent in protecting your identity, your assets, and your financial information.

A common dilemma in organizing your financial documents is to know which physical or digital receipts you should keep and which ones you should shred and dispose of. This can be solved by understanding the purpose and life cycle of receipts as you organize your financial records. A cash grocery receipt is short-lived after the amount is transferred to your budget tool, but a receipt for a credit card purchase may need to be recorded in the budget and retained until it is verified against the credit card monthly billing statement. Receipts for larger purchases that have warranties should be kept until the warranty period ends. Some examples of items that may come with warranties include laptops, smartphones, and other electronics, furniture, appliances, cars, car batteries, etc.

 

Practice

Collect and organize your financial information!

Were you able to locate all of your financial documents? Did you create a personal financial directory? Think about paying it forward and teach someone how to organize their financial documents.

 

Congratulations! You can move on to Step 3: Track money coming in

To review the full module on Budgeting, click here.