How complicated is your financial life? I have four different bank accounts, two investment accounts and two retirement accounts. Add to that my loans, numerous credit cards and all the various bills to pay each month and it starts to get a bit confusing. I can’t remember half the passwords or account numbers. Mr. M, who has zero interest in finance, has absolutely no idea where our money is kept.
A Financial Inventory
A financial inventory is a log of all your various financial accounts. In addition to names and account numbers, you should include other pertinent information like passwords for online accounts, due dates for bills and contact information for each account. This last bit can come in handy if your credit card is lost or stolen. It also helps if/when someone else needs to handle your finances for you. How much information to include about each account is up to you, but I say keep it simple. Your inventory shouldn’t take much time or be a burden to create.
What to Include and Where to Keep It
There is an endless list of possibilities for what to include in your financial inventory, each person’s situation is unique. Here is a short(ish) list:
- Bank Accounts
- Brokerage Accounts
- Retirement Savings
- Savings Bonds
- Student Loans
- Credit Cards
- Car and Personal Loans
- Mortgage/Equity Line of Credit
- Property Taxes
- Insurance
- Utility Bills
- Business Accounts
You should keep two copies of your inventory in different places. Do you have a parent or other trusted family member that can keep a copy? The other can be kept closer to home in a safe or safe deposit box. It goes without saying, there is some valuable information for thieves in your inventory. Make sure someone, your partner for example, knows that the inventory exists and where to find it.
Keeping it Up to Date
Once a year you should review and update your inventory. Some loans may have been paid off, other new accounts opened. This task won’t take long.
Preparing my Financial Inventory
I started my financial inventory today, primarily to have a concise record of my accounts. But also so Mr M knows where to find the money if the unthinkable happens. Creating a financial inventory is a simple task you can do to organize your finances.
Posts
8 comments:
I do this once a month, when I update my NetWorth IQ and do the monthly update on my blog.
I keep every account in an Excel spreadsheet which automatically calculates my net worth and graphs my progress towards my goals.
I have 3 bank accounts, 2 Tax Free Savings Accounts, One Retirement/Brokerage account, 2 credit cards and one line of credit.
This is a great idea. Though it does make me nervous about identity thieves.
Oh god. I should totally do this. Thanks for the reminder! I'd hate for any of my money to go unclaimed because I was so disorganized.
Ya, I was just thinking about organizing all this, too. If you bank with WF they now have VSAFE where you store electronic copies of important documents. Forget using a SAFE anymore. lol!
I think especially good to do now that tax season is coming up. :-)
I have been doing this since college and find it very helpful. When my aunt died my father and cousins had a horrible time sorting her finances because they were so disorganized. My similarly disorganized father was inspired by this experience to get his finances organized. When he died a couple of years ago it was easy to take care of everything because it was all listed on one piece of paper. Thanks, dad!
This is GREAT advice. I know if something happened to me, my hubby wouldn't have a clue where to start with the bills. Thanks for the tip!
@Fool - I guess you're not a fool since you already keep an inventory!
@asgreen - Safety is a valid concern, it should be kept in a safe or lock box not with your other paperwork.
@kat - it also helps if you need someone to take care of your finances temporarily. I've known several women who had high risk pregnancies and ended up hospitalized on bed rest for several months!
@MF - good idea, take an hour while you're doing your taxes.
@KM - I'm sorry for your loss, your dad was very thoughtful for organizing his finances and making it easier for you.
@MrsMoney - like I said above, we could be incapacitated for good reasons like having a baby. Imagine coming home from the hospital and the house is in foreclosure cause hubby couldn't figure out how to pay the bill!
You know, it's sad but as I was working on a template of my will I realized that I don't have anyone around my age that I can trust to be executor(s), and/or make medical decisions for me.
Same for the financial inventory, I was starting to put it together when I was arrested by the thought that I don't know anyone who's nearly financially competent enough, and cares about me, to take care of my business.
I might need to start training my little cousin.
Post a Comment