This might sound like a boring episode, but please bear with us. We can promise you that taking some time to put together a sound record keeping system for your financial life now, will pay off down the track.
In this episode we cover some of the times where having your financial records in an accessible place can come in handy, and why we encourage you to set some time aside after listening to this episode to get on top of things. Plus, we cover the different financial records you’ll need to keep track of, and some ideas on how to do it (and minimise the paperwork and admin time in your life).
Here are some of the times where having your financial records in an accessible place can come in handy, and why we really encourage you to set some time aside after listening to this episode to get on top of things:
- Tax time: make your life less painful, avoid mistakes that could hit you down the track, maximise your refund and keep your accounting bill down (or at least the time you have to spend doing your taxes).
- Action point: feel in control by having a system: take a photo of your receipts and save them in iCloud, a tax app or Google Drive.
- Emergency/Natural disaster situations: when you need to access your ID details and insurance numbers quickly, you’ll be glad you’ve got them safely backed up in the cloud, so you can login and access them from anyone’s device, anywhere in the world.
- Idea: buy a $100 safe from Officeworks and create a document that has a list of your internet banking, brokerage account, Super and email passwords. A password manager could also help, such as Google or Microsoft or Okta.
- Illness & death: make it easier for your loved ones to look after your affairs while you’re unable to or after your gone, this also goes hand in hand with POAs and wills.
Types of records
Many listeners would be aware that financial record keeping is important to keep tack of capital gains/losses and dividends for tax time, but there’s a whole lot more to your financial life than that, which is worth keeping good records of.
💡 Consider creating an asset register (including digital assets) with the location of the asset and your account number, and giving a printed copy to a trusted family member, friend, lawyer or financial professional
In this episode we cover some of these areas of your finances where you might want to keep records:
- Copies/photos of key ID documents
- Will & POAs
- Insurance documents (travel, life, TPD, income protection, health, pet, home & contents etc.)
- Super fund details
- Bank accounts, debit cards, credit cards
- Details for any investments e.g. managed fund, micro-investing app, brokerage accounts, crowdfunding —> transaction history & income details, tax statements
- Property details & details for service providers, agents, loan.
- List of any outstanding debts
- Contact details for your accountant/adviser/broker who might be able to assist with details if you lose track of them.
- Your investment plan – may be of help to your POA as they’ll be able to understand how you were managing your affairs
- Action point: Doing this is a great way to declutter your financial affairs. As an investor, there are two documents you should have: a simple investment plan (incl. goals, how you plan to invest, how you’ll manage tax and brokerage, etc.) and a statement of account (where your money is, login details, instructions to your next of kin, etc.)
Ways to keep track of these records
There’s a whole lot of different financial records to keep track of – so what’s the best way to do it (and minimise the paperwork and admin time in your life)? In this episode we discuss idea like:
- Dedicated folders set up in Google Drive, Dropbox or iCloud (essentially any service you can access remotely from someone else’s device)
- Email folders set up in your inbox
- Sharesight is a super helpful tool for investors keeping track of their portfolio – free for under 10 positions
- Monthly person admin meeting with yourself blocked into your calendar
- Wills and legal docs kept in a safe (someone apart from you should know the code) or with your lawyer/adviser
- Printed asset list (including digital assets): give a copy to a trusted family member, friend, lawyer or financial professional.
