Organizing and Securing Your Financial Documents

Organizing and Securing Your Financial Documents featured image

Cybersecurity breaches have been all over the headlines recently, from data theft to ransomware that shuts down hospitals, local governments, and even oil pipelines. So what can you, personally, do to protect your sensitive files, documents, and personal information? In this article, we’ll cover six tips for organizing and securing financial documents, both physical and digital.


Take stock and create categories

Step one consists of accounting for all of your important financial information. Gather documents according to the categories below, plus any others that make sense for you, in order to make the organization process easier.

  • Vehicle: Titles and/or auto loan paperwork
  • Home: Rental lease or deed to your home, closing paperwork, and/or home loan paperwork
  • Deposit accounts: Monthly statements and other paperwork for checking and savings accounts
  • Credit cards: Statements and other paperwork for your credit card(s) accounts
  • Healthcare: Medical and dental bills, explanation of benefits (EOB) statements from your insurance provider, and other paperwork
  • Insurance policies: Policy paperwork for home/renter’s, auto, life, and other insurance paperwork.
  • Investment accounts: Account statements and other paperwork for your retirement, brokerage, and other investment management accounts
  • Personal loans: Statements for personal installment loans and lines of credit, as well as any student loans you may have
  • Taxes: State and federal returns and supporting documentation from at least the last three years
  • Utilities: Account contracts and recent billing statements
  • Estate Planning: Documents related to your estate plan such as wills, trusts, POAs, etc.
  • Life: Birth certificates, marriage certificates, divorce decrees, passports, and social security cards

Once you’ve collected and categorized your documents, give each category its own folder. Whether by hand or printed label, label each folder for easy recall later. You should also categorize and create folders for all your important digital documents.


Keep certain physical documents in secure storage

While a majority of your documentation can be digital, there are a few physical documents that you should keep in a safe place, such as a passport, birth certificate, will, power of attorney documents, important titles, etc. Consider purchasing a home filing cabinet with a lock or a fireproof safe, or sign up for a safe deposit box at your nearest FNBN branch location. This will protect your sensitive personal information and other valuables, such as jewelry, from theft should anyone break into your home.


Create secure storage for digital documents

For the highest level of protection and security, consider investing in secure encryption software for your digital files and documents. Not sure what to choose? Check out PC Mag’s “The Best Encryption Software for 2021”. You can also use password protection software like the free KeePass and other paid options to protect your online accounts from unauthorized logins and data theft. Another option is to store digital files on an external hard drive as a backup and keep that hard drive in a safe and secure location along with your sensitive personal papers.


Reconcile and file receipts for major purchases and tax reasons

Follow this 3-step process to organize your receipts:

  1. Keep new receipts in an action folder labeled “To Reconcile.”
  2. As your monthly checking account and credit card statements arrive, mark off each purchase that matches your to-be-reconciled receipts.
  3. Keep a “further action” folder for any receipts or credit card statements you may need to dispute or return purchases with.
  4. Save receipts to staple to the warranty and/or instruction manual for major purchases such as furniture, electronics, appliances, and more. Categorize in separate folders accordingly.


How long should you keep your records?

Once you’ve put the initial effort into getting organized, sustain your progress with recurring maintenance sessions to get rid of the papers you no longer need. Use these guidelines to determine when you can safely let go of certain papers.

  • Tax Documents: Hold on to tax returns and supporting documents for seven years. This is because the IRS has three years after you file to audit your return for a good-faith error and six years to challenge you for underreporting your gross income.
  • Home Records: Hold on to all paperwork related to your home purchase as well as any substantial improvements you make for at least six years after selling your home. If you rent your home, you can shred old leases after moving out and getting your security deposit back.
  • Loan Paperwork: Keep documentation related to mortgages, auto loans, student and personal loans until you’ve repaid your debt. It’s also a good idea to hold on to loan payoff letters for at least a year afterward in case any discrepancies arise.
  • Financial Statements: Trying to reduce your paper clutter? Sign up for e-statements and you’ll have on-demand access to your archived statements any time you need them.


Securely dispose of unnecessary documents

Once you’ve determined which documents you need and which can be tossed, take care to shred them rather than dispose of sensitive paperwork in your trash or recycling can. After all, much of the information in these documents can be used to steal your identity, tap into your finances, etc. You can buy a home shredder, pay to have your documents shredded at a shipping or office supply store, or look for free community shred days. Learn more about shredding in this article from our blog.


Learn more about keeping your accounts secure!

At The First, your privacy and the security of your personal information is important to us. Read more security tips and contact us with any questions about keeping your FNBN accounts secure.