Keeping Good Financial Records:Taming The Paperwork Tiger

Financial record-keeping is a personal thing. Use whatever organizational tools work best for you. Use what you are most comfortable working with. As with other areas of personal finance, the simplest approach is often the best. Just make sure your personal organizational system does what you need it to do.

Record-keeping need not be complex, but it should be thorough and complete. You are most likely to stick with an organizational system that you are comfortable using.

A good record keeping system is one that saves you time, and moves you on to other business of the day. A good record keeping system does not demand continuous monitoring, as many day planners do. Keep it simple.

A good system should be one where everything is in one place, so you know where it is when you need it. It is not necessary to own an expensive computer in order to keep good records. A basic, simple method of record-keeping using a ledger, accordion file, index cards, or some other means of keeping your paperwork in order will serve your purposes quite well. (It's a good idea, anyway, to have "hard copies" of all your important business and financial records. Computers and data systems crash! Financial "identities", unfortunately, can be stolen!) Keep in mind that you want to know where your records are and be able to retrieve your records when you need them.

If you do have a computer, by all means make use of one of the various personal finance software programs currently available. Quicken and MicrosoftMoney are two of the most popular.

A record-keeping system should be:

1. Simple and easy to use.

2. Do what you need it to do.

Have one place where you keep all financial records and materials. If you are self-employed, keep your business and personal expenses separate.

Keep records up to date and accurate when buying and selling stocks and bonds. Keep all trade confirmation slips and monthly statements from your brokerage account.

Keep track of your expenses and tax deductions as they occur. Your cancelled checks provide tangible proof of deductible tax expenses incurred over the course of the year.

Save credit card receipts.