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Benefits of a Filing System
by Joyce Moseley Pierce
With a new year comes the reality that April 15th is just around the
corner! It seems that the process of gathering information for preparing
taxes is almost as painful as writing that check to the IRS! However, if
you have an effective filing system the process it may not hurt quite as
much, and it will certainly help cut down on the time spent searching
for receipts if you are currently throwing everything in a drawer.
Years ago we invested in a 4-drawer file cabinet. You may not need that
much space, but whatever you use, even if it's a cardboard box, think
about purchasing manila folders to create a file for each category. Set
your files up in a way that makes sense to you. My file drawer includes
files for homeowners insurance, health insurance, life insurance, Visa,
American Express, Bank of America (for checking), Ameritrade, Ford
Explorer, Ford Windstar, medical, travel programs, contributions,
utilities, receipts, and home. If you receive monthly statements or
write checks to them, you probably need a folder.
I use a hanging file folder just so the manilla folders don't get lost
in the bottom of the drawer, but then I also keep a manilla folder
inside each hanging folder. When the end of the year approaches, I
simply pull the old manilla folder out of the hanging folder and replace
it with a new manilla folder that is marked
with the new year. For instance, I will replace my "Visa 2002" folder
with a new one that says, "Visa 2003." I will put all of the 2002 files
in a cardboard banker's box with a lid, and will also create a new
manilla file to go in that box that says, "Income Taxes 2002." In that
file I will place statements and information that will be necessary for
claiming deductions on my tax return. It helps keep me from scrambling
at the last minute to find the mortgage statement and W2s.
In addition to these "removable files" that are designated by the year,
I have files that will remain in my cabinet until I no longer own that
item. For instance, the "Ford Explorer" file contains every invoice for
every repair made to that car in the past 10 years. I learned years ago
that it's important to track even the oil changes in case you have a
problem that might be covered by the warranty.
The manufacturer will require proof that you have maintained your car
properly before they will honor the warranty. This file is also helpful
to have when you try to sell the car. The file for "home" contains
service policies, receipts for the new air conditioner we had to put in
this summer, and anything relevant to operating our home. In fact, in
the hanging folder for "Home" contains several folders that separate
this information.
If you don't have a serious filing system, now is the perfect time to
start one. Once you set up the system and start using it, you will see
the benefits of having your paperwork organized. It feels good to be
able to locate a receipt when you need it and may actually help you save
money by being able to provide proof of purchase.
About the author
Joyce is a freelance writer and owner of Emerson Publications.
She is the creator of "All
They'll Need to Know," a workbook to help families record personal
and financial information. ISBN 0-9725726 She is also the editor of The
Family First Newsletter, an ezine for families with young children. To
subscribe:
http://www.emersonpublications.com/pages/848640/index.htm
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