Tips for Family Record Keeping

Creating Your System for Personal, Family and Financial Records

Last week we explored the factors that determine how long your tax records should be kept on hand.  This week we’ll extend that conversation and dive deeper into what makes a record keeping system useful.  Here are some insights on questions you may have as you begin to create a new system or modify your existing one:

Why should I keep records?

·        Income tax preparation requires information on tax deductions; records substantiate deductions.

·        Death, fire or theft may call for records to establish ownership; records help in estate settlement and insurance or benefit claims.

·        Records document certain transactions; if someone makes a mistake or official records are destroyed, your records may be needed.

·        Records could shorten the time it takes to collect insurance, military   benefits, veteran's benefits or an income tax refund.

·        Evaluating past records provides information for planning future spending; records provide a summary of your financial situation and can help you keep a close tab on where the money goes.

What kind of system do I need?

·        Use a system that fits your family's lifestyle

The family finance center might be as elaborate as a home office or as simple as a drawer in the kitchen or a file cabinet in the family room.

·        Decide who will take major responsibility for record keeping

All members –including children old enough to understand – should know how the record-keeping system works and how information can be found easily. Some of the tasks can be shared or delegated, but one person with the skills and interest should take the leadership.

·        Develop a regular schedule for organizing and stick to it

A routine will actually reduce the amount of time you spend on record keeping.

Next week we’ll wrap up our series on family record keeping by identifying how to organize your records.

Source:

HE-445 (Revised), May 1998

Debra Pankow Family Economics Specialist

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