By Karin Mizgala,
co-founder and CEO Money Coaches Canada
From January to April most Canadians are knee deep in financial paperwork. With tax and RSP season almost behind you, you may be left wondering what to do with all the financial paperwork that has accumulated over the months or in some cases years.
The question of what to keep, what to toss and how to stay on top of financial paperwork comes up a lot with my clients. With the movement toward digital financial records, it can be easier to be organized and less cluttered with paperwork.
Now is a great time to check-in on your financial management systems and to implement these easy ways to simplify and stay in control!
Here are a few financial tasks and organizing tips that you might want to check off your list before you kick back and relax into summer mode.
- Cull tax stuff and other financial paperwork
- Keep 6 years of supporting documents for tax returns
- Unless they are needed for tax back-up, you don’t need to keep investment, bank or credit card statements. Electronic records should be available from the issuer if needed. If you rely on paper copies, keep the statements for a year, then Dec 31st statements for the previous few years.
- Shred the old documents
- Set up a financial filing system for your important documents
- Set up a paper and/or digital system.
- Create folders for key financial categories. Here are some suggestions:
- Real Estate – Mortgage and Property taxes
- For a complete list, check out: My Financial Filing System
- Review your bank accounts, investments, and credit cards
- Do you need all of them?
- What are the fees and interest charges?
- Can any of the accounts be consolidated or closed?
- Review and update beneficiaries on your RSP, TFSA, insurance, and pension
- While you likely selected beneficiaries on account opening documents, your life may have changed (marriage, divorce, children) and the beneficiaries could be outdated.
- You might find the beneficiary info on your statements or on your online account. If not, contact your advisor or HR department.
- Confirm that legal documents are up to date
- If you haven’t reviewed your will, power of attorney, or health care directives in the last 3 years, this is a good time to do so.
- Is your prenup or domestic contract still relevant?
- Have you moved countries or provinces recently? Legal agreements may not be valid where you live now. Have a local lawyer do a review.
- If you haven’t gotten around to these important legal agreements, make an appointment with a lawyer and get the ball rolling.
- Share the location of your financial and legal documents and information with your executor, power of attorney and relevant family members.
- Check-in on your investments
- How are your investments holding up against the markets in general?
- Is it time to reassess your risk tolerance?
- Book a meeting with your investment advisor for a review
- If you haven’t heard from your advisor recently, it might be time to get a second opinion on your portfolio.
Whether you are maintaining digital or hard copy financial and legal records, make sure that your files are secure and only accessible by you and trusted representatives.
One last to do!
Here’s a more comprehensive Financial Plan Checklist. If you’ve answered No or Don’t Know on more than 5 items on the checklist, reach out to a Money Coach to help you take control. With so much uncertainty around us, there has never been a more compelling reason to do so.
Read about how we’ve helped people just like you feel empowered and ready for the future.
We can help you with decluttering your money and taking control of your finances.