Financial organization

By Byron Moore, posted September 18th, 2014

Question: I'm trying to get all my financial stuff organized. What do I need to do?

Answer: Let's not do this: straighten up all the unopened bank statements and investment account reports on your desk and call that financial organization.

That's just making your mess look neater.

For something to be organized, it has be ordered, structured toward some purpose and well thought out. To do that, you've got to know what you have, where it is, why you have it and contact information for each separate service provider. Let's take them one at a time:

1. Know what you have. Begin with the major categories most of us deal in: insurance, banking, investments, retirement, income taxes, debts and legal documents. For simplicity sake, you could take out a legal pad and write down each of those headings on a separate page. Then under each heading, write any account, policy, contract or document you have under the appropriate heading. Write down the actual account or policy number for each item.

2. Know where it is. Having a list of each item is fine, but do you know where it is? Could your spouse, using your list, locate your will? Your life insurance policies? Your tax returns from last year? I suggest either a filing cabinet or a simple file box where you keep all your important documents? Even better, use a document scanner and keep an electronic copy as well.

3. Know why you have it. Assume you are not available to answer any questions. Your surviving spouse or children are looking at your list of financial accounts and documents. Eventually, someone is going to ask the question, "Why did Mom have this?" or "Why did my wife handle this in such and such a fashion?"

Actually, you need to be asking yourself that same question before something happens to you. Why do you have the insurance you have? Are the wills you drafted when the kids were in kindergarten still appropriate now that they have kids in kindergarten? Do my wills and my life insurance policies say the same thing, or are they in conflict?

On any matter in which there might be some question, why not write a quick note and place it with the appropriate document. Tell your loved ones what you had in mind. There will come a day they'll deeply appreciate it.

4. Know whom to contact. Despite their best efforts, attorneys get old and die. Life insurance companies change their names. Investment houses change hands. CPAs retire.

Is the contact information for your legal, tax, insurance and financial relationships current? After finding your life insurance policies, would your survivors have to search high and low to find the company, or will you make matters easy on them by leaving them the name and phone number of a current agent for the company?

Get financially organized. You'll be doing yourself and those you love a big, big favor. 

 Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Email him at bmoore@argentmoney.com. Write to him at 500 East Reynolds Drive, Ruston, LA 71270 or call him at (318) 251-5858. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc.  No forecasts can be guaranteed.  Argent Advisors, Inc. does not offer tax, insurance or legal advice.  The information contained in this column should not be construed as a substitute for personalized investment, tax, insurance or legal advice.