Cut Your Financial Clutter - Know What to Keep And What to Never Toss

I recently covered the topic with CTV's, Daryl McIntyre (you can watch the YouTube video here).

Clutter is so difficult to deal with many individuals have no idea what documents they need to keep, which they should have and where they should be stored.

There are three keys to dealing with your financial clutter:

Like this article? Don't miss another one. Follow us on Twitter and Facebook. 1. What should you toss?

I once knew a couple that lived on a farm (had lots of storage) and kept every item of paper for the past 40 years of their lives. Needless to say, it was a massive burden for their children to sift through everything at their passing.

Toss:

• Taxes after six years can be tossed but ensure that you also keep supporting receipts.
• ATM slips and utility/phone bills etc. – read them carefully to ensure you're not being over charged, confirm things are correct, but you don't need to keep these.
• When tossing, shred any documents that have more than your name on it. If it has an account number or more, be safe and shred it!
• Consider going paperless if you really like to keep track year over year.
• Credit card and bank statements, utility bills; read them carefully to ensure they're accurate (better yet, keep track online) - but you don't need to keep them past a month or so.
• If you're self-employed and have a home office that you can write off, ensure you DO keep documents like your phone and power bills for at least six years as they would form part of your income tax back up.

2. What should you keep?

• Life insurance documents, investment statements – anything financial.
• Create a binder and create a one page list of the professionals you deal, along with and any account numbers and their contact information – i.e. lawyer, doctor, financial planner and accounts, life insurance agent, banker.
• Awards, degrees, other important documents.

3. What are you missing?

In your quest to limit your financial clutter, you actually need to assess if you're missing any key documents.

Do you have a will, power of attorney, or living will? These are very low cost documents that your lawyer will draw up and can save your loved ones considerable grief in a time of need.

Your will can be kept in a safety deposit box and copies with your lawyer and or executor(s). But for powers of attorney (documents that detail your financial wishes) need to be kept handy in the event that the urgency arises. If you had your power of attorney in your safety deposit box for example, it would be very difficult for the person you deemed to look after your finances to convince your bank to let them into the box (to prove the document stated they were the trustee). Equally, your living will or personal directives - as it's called in some provisions - should be kept close by - and copies in several places such as your home and car (you can still protect originals in your safety deposit box).

Lastly, keep copies of prescriptions, your driver's licence, credit cards and identification in a safe spot in your home. Store other documents in a locked filing cabinet or consider a home safe. As important as they documents can be, it's equally important to notify your loved ones where they are and when you move them for easy access in the event of an emergency.

Liked this article? Don't miss another one. Follow us on Twitter or Facebook .



Kelley Keehn is a personal finance expert and author of The Money Book for Everyone Else and The Prosperity Factor for Kids. For more information, visit www.kelleykeehn.com.

Do you have a money question? Drop Kelley a line at wealth@kelleykeehn.com