Frugal Friday: A Filing System Can Save You Time & Money

This post is linked with Frugal Friday @ Life As Mom.

Tuesday evening I had the rare opportunity to be part of a "Going Green" ladies meeting at our local church.  Since it was the day before St. Patrick's Day, everyone took advantage of the holiday and the "green" theme... you've never seen so much green food in all of your life :o)  I was one of five speakers, each of us briefly talking about a green topic and relating it to our spiritual lives.

In leiu of a typical icebreaker game, the ladies were posed this question:  If your home was on fire, and all of the people and pets were safe, what three things would you save?

Common answers, understandably, were items of a sentimental nature, such as photos, keepsakes, Bibles, etc.  My first thought was a little different!  I'd have to go back in for my two drawer filing system.  No question about it.

You see, we have our financial records, wills, passports, tax returns, adoption records, and so much more in those two drawers.  Life *could* be very stressful if we had to attempt to replace those items.

We didn't always have a detailed filing system.  A few years ago, our records were a mess.  Money slipped through my fingers as I paid our accountant for the extra time she spent working because I didn't have the proper information at my disposal when she needed it.  Money floated carelessly out the window when I couldn't find the warranty information for an expensive item that needed to be replaced.  And cost of my own time spent searching for so many records that seemed to disappear?   I can't even begin to put a price tag on it.

Then one day I decided to peruse one of David Bach's books, Smart Couples Finish Rich.  The book itself wasn't that impressive to me (my financial favorites are Your Money Map and The Millionaire Next Door) but there was a section about his filing system that caught my eye.

On page 63 he made this statement, "I'm well aware that most people's filing system consists of an old shoebox or old book carton into which you toss all the old bank statements, stock certificates, insurance policies, and other financial 'stuff' you know you should keep but don't really feel like dealing with."

Yep, that was us.

The next few pages were gold to me.  He encourages the reader to go and get a dozen or so hanging folders and a box of 50 file folders to put inside them.  I did :o)

Then he gives ideas for labeling them.  Here's the twelve labels he recommends (they are discussed in detail in the book):

1.  Tax Returns
2.  Retirement Accounts
3.  Social Security
4.  Investment Accounts
5.  Savings and Checking Accounts
6.  Household Accounts (for example, home title or mortgage info)
7.  Credit Card Debt
8.  Other Liabilities
9.  Insurance
10.  Family Will or Trust
11.  Children's Accounts
12.  Inventory Planner (something specific to his program; we skipped this one)

As we began to put these files together, we found we were missing many documents that we needed.  We did the best we could and, in time, the filing system began to be a fantastic work-in-progress.  Over the last few years we've added to it as needed and now there are many more files than the mere eleven we began with.

The few hours it took to create a proper filing system for our records has saved us an invaluable amount of time, money, and stress.  It was certainly time well spent.

What would you save from your burning home if all the people and pets were safe?