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How to create and organize your personal financial information binder

How to create and organize your personal financial information binder

January 16, 2020

Hi everyone! Welcome back to Melissa Making Cents!

I have spent a good amount of time this year setting my personal goals for the year.  Honestly… it has been a little overwhelming. There are so many things I want to accomplish, yet only 365 days to get them done. So I have pulled out my trusty notebook, and decided to get organized!  

This is also the time of year when I tend to have a conversation about getting your finances organized with a lot of my coaching clients.  The best place to start when trying to tackle your finances…. is to get them organized. 

Organization is the key to becoming financial empowered

Yes.. I know it sounds super cliche. But it is almost always best to get organized first, because it’s often overwhelming to know just where you should start. Do you start with your credit? Investments? Insurance plans? Have you updated your estate documents?  (Do you still like your children enough to leave them everything…. only kidding…ok...maybe not) By getting organized, you may set different goals for yourself. 

I mentioned ways to get organized in my blog 5 ways to kick-start your finances in 2020.  There are many different ways to accomplish this goal. Some of you are tech savvy, and prefer to do this online, and some of you prefer a more tactile experience. Either way, spend a few hours getting information together.

Today, I’m going to walk you through the more tactile organization method. This is very handy for a few different reasons. 

  1. Getting Records of your Financials in a single organized spot
  2. Helping Your Parents get Organized
  3. Being able to help loved ones to care for you

I can’t help but think that, if my uncle that I mentioned in my blog about taking control of your finances had a personal financial binder, he would have had a smoother transition after the passing of my aunt. 

After all the information below  is gathered, you can sit down and create or update your financial plan.  I will spend the next few months visiting each topic individually. After all… Rome wasn’t built in a single day…. and neither was your financial future.

Start with a trip to your favorite office supply store!

As old fashioned as it sounds, I like to start with a large 3 ring binder, and by large… I mean the “Mack Daddy size”. This way you have plenty of room to work!   You will also need a hole puncher, 15 dividers, and a bunch of sheet protectors. This way you can keep your information updated without leaving your paperwork in piles on the kitchen counter.  (I said we were getting organized, and not moving piles of paper from one surface to another!)

Go out on a limb and get crazy selecting your favorite binder! We want this project to help you feel in charge and empowered. Selecting your favorite shade of blue or neon pink may just give you the boost you need!

Make dividers for the major financial topics

I like to start by creating my divider tabs for all the topics that I have listed in the graphic above. This way it makes it easier to see where we are going with the project. You may find that you are missing information for a certain tab.  This could mean that you have no loans or credit cards! Wahoo! Or…. that it’s time to face the music and contact that estate attorney about finally setting up your legal documentation. Let’s face it...Nature always wins at some point.

Tip #1 - While gathering your information, make a list of each account you have under the category it belongs to.  Include the name of the institution, account number, any specific contact person you may have, and write down your online username. This way your family knows who to contact in case you are not able to handle your finances yourself.  This will all be placed behind the main tab!

What are your financial goals?

You can save this for later, or jot down a couple of preliminary goals now.  Your goal section is going to change over time. Think about short term and long term goals. Short term goals may be as simple as starting an emergency fund, or paying off debt. Medium term goals might be saving for your child’s college, or saving for a major purchase.  Long Term goals are generally more broad sweeping… Retirement, Financial Freedom, taking over the world/global domination… you know.. The things that need extra planning and polish.

  • Short Term Goals - 1-3 years
  • Medium Term Goals - 3-7 Years
  • Long Term Goals - 7+ years

Estate Planning documentation is essential to healthy finances

This tab is where you are going to keep your most current estate documents.  I’m going to recommend that you put copies in your binder, but make notes as to where the originals are and who else has copies. If you haven’t done your legal work… There is no time like the present. You definitely don’t want to run the risk of having a family disagreement over what they think you may have wanted. You also don’t want to run the risk of decisions being made for you. 

No one likes to think about their death. It’s not pleasant in any way shape or form. A recent study from AARP finds that “a whopping 78 percent of millennials (ages 18-36) and 64 percent of Generation Xers (ages 37-52) do not have a will.  Why do so many people fail to tackle or complete estate planning? The top two reasons of the people surveyed: They “hadn’t gotten around to it” (47 percent), and they “don’t have enough assets to leave to anyone” (29 percent)” 

I understand the mindset behind thinking you don’t have enough assets to leave to anyone. But… your legal documents go far beyond just leaving assets to people.  Estate planning also includes creating Powers of Attorney, so that your loved one can handle your affairs in the event that you are incapacitated. Your legal documents also include medical directives, such as a do-not-resuscitate order, so you make the decision for your family to not be kept alive on a ventilator should something happen.

What are your sources of income?

I like to put this information in my binder to try to keep myself up to date.  For some this might be putting a copy of your last pay stub of the year, w-2/1099, social security statements, or pension information. Having all the information at hand will make it easier to know where your money is coming from.  You will also use this information when building your financial plan. By reviewing your income, you can think about making changes that help you save for retirement and reduce your taxable income. Plus… the info is easily checked off when it’s time to file your taxes for the next year.

If you collect a pension, or you will collect a pension at some point in the future, it's important to have the information handy. You will want to review the beneficiaries that may be entitled to receive your pension, should something happen to you. It is also important to know how the pension is structured.

Credit Reports are a snapshot of our financial health

As a general rule I suggest that you have your credit report run often.  This way you can keep up to date with your accounts and keep tabs on any fraudulent info or requests.  Since there are three reporting agencies, I like to cycle through each agency every 3 to 4 months. Each agency may not report requests at the same time, so pulling them on a cycle will help you keep a more true picture throughout the year.

Go through your report and make sure the information is all correct. Then put the report in one of your sheet protectors. I try to place all the pages in one “pocket”, that way everything is together and you do not have to flip through pages individuals. You can also hole punch it if the report is too  and place it directly in the binder. I’ve stuffed a good 30 pages in the pockets, so I can attest they hold A LOT!

Gather your banking and saving account information

Take your bank statement from the end of 2019, and put it in a sheet protector pouch. If you have multiple accounts, each account will go in a separate pouch. This may mean that you have to download your statement from your online bank account. We need to know where you keep your money! Later you can use this statement to create a budget, or gather any automatic payments. 

Next you will want to gather your savings account statement. Having a savings account at the same bank makes it easier to save up an emergency fund. Some may find it a little too convenient to have a savings account connected to your bank account.  Being able to transfer your money between accounts can be a blessing or a curse depending on your money management skills. If you are someone that constantly has money “burning a hole in your pocket”, you may find it best to keep your accounts separate to avoid draining your emergency savings.

Gather your investment related account information

There are many different ways to invest!  It can be as simple as a bank CD, or more advanced to include a complex investment plan. Investopedia defines an investment as the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.  

Now is the time to gather any other investment related account information you have. This might be a taxable investment account that you started, or it also extends to any retirement accounts you may with your current (or previous) employer.  It may also be beneficial to print a copy of your employer’s Summary Plan Description for your retirement benefits. Each plan is different as far as contributing and matching! Keep on top of any changes happening that may affect your retirement account.

If it’s anything investment related…. take a copy of your year end statement and put it in a pouch, and behind the correct divider tab.

Life Insurance protects your family’s financial future

Life insurance helps with planning for your loved ones’ long-term health and happiness, providing you with peace of mind that your loved ones are financially protected.

Life insurance also comes in many different forms. From simple to more complex policies, an individual’s need for life insurance will depend on their financial circumstances. Gather your most recent statement, and have your insurance broker run an illustration on your current policy.  Make sure you understand your policy and any riders that were purchased.

Long Term Care Insurance is also a big part of people’s financial plans. Do you have a stand alone policy? Or does your life insurance policy have a Long Term Care benefit?  How much will it provide for your future, and what are the requirements needed to take advantage of using the benefits.

Insurance Coverage can include literally everything under the sun

Have you ever stood in the greeting card section of a store, and laughed because you didn’t know there was a card to celebrate some strange off the wall topic.  Well… Insurance is pretty much the same. Name a topic and there is likely an insurance policy for it. Gather up any insurance policies you may have purchased. For this divider, we will want copies of policies, or summary pages also called declaration pages, if the policy is very large. 

  • Home Insurance
  • Rental Insurance
  • Auto Insurance 
  • Umbrella Liability Policy
  • Jewelry Insurance
  • Pet Insurance
  • Health Insurance
  • Disability Insurance

If you noticed that I have a separate entry for Life insurance and Long Term Care… Good job! In the world of finances, they are a tad different.  So they deserve a divider all their own!

Real Estate or Rental Information

We are going to devote this divider tab to all things real estate.  If you are a homeowner, you will want to grab a copy of your mortgage statement, tax assessments, and loan amortization schedule.  If you are currently renting your home/apartment, you will want to place your most recent rental contract behind this tab. 

If you are a real estate investor, place any information about your rental properties here. You should also include any property management companies, or contracts with individuals leasing your property. 

Monthly or Annual Bills for Service Providers

You may have decided to “Cut the Cord” with your cable company, but you still have regular monthly expenses.  For this tab you will want to gather anything you pay regularly. (Monthly, Semi-Annually, or Annually) This is likely cell phones, cable, internet, basic house utilities.  This may also include anything you have a contract signed, like a gym membership or coaching contract. It may be helpful to comb through your bank or credit card statements to complete this list.

Tip #2 - If you are currently renting property, it’s good practice to keep 12 months or utility bills handy. If you are moving in the near future, they are sometimes required, and not all utility providers are tech savvy with their records.

Credit Cards are a huge part of most of our lives

I remember watching the television growing up and seeing someone charge their purchase to a credit or charge card.  It fascinated me that you could pay for things that moment that you didn't necessarily have the money for. Credit cards have gone from being a gimmick just a few decades back to being a major part of Americans' financial lives. As most college kids will tell you… having a credit card is no longer a status symbol. These days you can get one with the spin of a wheel… and a free t-shirt. 

In fact… the US Census Bureau reports there are approximately 1.27 billion credit cards being used today in the United States.  In case you were wondering… the US population as of 2019 was 327 million people! That’s giving a lot of credit where credit may not necessarily be due!

Gather your last statement of the year, as well as the annual summary that most cards now provide. If you have multiple accounts… each will go in a separate pouch. 

Last but not least gather your loan information

Car Loans, Student Loans, Personal Loans…. They will all be placed behind our final divider tab. Like everything else, we are looking to pull your last statement from the year before. We want to see balances, interest rates, dates, and payment information. 

If you have student loans and qualify for the Public Service Loan Forgiveness program, this is also a great place to keep a running total of qualifying payments. Visit my blog on student loan forgiveness programs for more information.

Once your gathering is complete, you can take a well deserved break

Once you have completed the gathering all the information listed; place it in the sheet protector pouches behind the corresponding divider tab.  (if you have not already done so) Hopefully you have made a list of the accounts and various properties along the way to save in your “Master List” tab.

Take a well deserved break!  As simple as this task sounds…. It’s actually really hard work! Especially if this is your first time working with your financial binder. Remember this project is primarily for the benefit of you and your family. Having your information organized in a central location can save a lot of headaches in the future. 

If you have not yet taken responsibility of your finances this project may bring up negative emotions

There is a really good possibility that this project causes some anxiety or other negative emotions.  Facing account balances might be hard for a person that is currently struggling financially. This project is about being realistic, and beginning to take ownership of your financial future.  Yes, it is a very real possibility that your balances are hard to swallow. Your journey has only just begun, and now you can begin working towards goals with your eyes wide open.

As a CERTIFIED FINANCIAL PLANNER™, I take great pride in working with women and families to understand their needs and help them make better financial decisions. If this process has overwhelmed you, please call, email, or click the link below to schedule an appointment. 

Until next time... this is Melissa Making Cents!

Melissa Anne Cox


College Funding and Student Loan Advisor