Sometimes, you have to know when to call in the experts. And when it comes to financial organization, Judith Heft, owner of Judith Heft and Associates, is the woman to see. Her company specializes in bookkeeping and daily financial management for busy people.
So this week, I have a guest blog post from Judy with six steps she personally takes to get her financial files prepared for the end of the year. Follow her example, and you’re sure to be prepared for that dreaded visit to the accountant in 2012.
Six Tips for End of Year Financial Organization
By Judith Heft
It’s the end of November, and this year is coming to a close. I have mixed emotions about this. I don’t like the cold, so I’m not excited about winter. But, I am excited about new, clean, and orderly files. I think of it as a new beginning!
1. Out with the old and in with the new. By the end of the year, my files are jammed. I subscribe to the concept that objects that no longer serve you prevent fortune from coming into your life. At the end of the year I go through them and toss or shred what I don’t need. I love shredding and throwing old paperwork out. It’s cathartic for me. And remember that insurance policies can be shredded when the new policy effective date starts.
2. Develop a filing system that you are comfortable using. It doesn’t really matter what filing system you use, as long as it works for you. I like to use a monthly accordion file with elastic to keep it closed. That way I keep paid household bills in a neat and orderly fashion.
3. Make a separate file with anything that is tax deductible, labeled “Tax Prep (Year).” When my tax documents start coming in from my financial institutions in January, I have a place to put them so I am ready for my CPA. And, of course, I have everything categorized in Quicken so I can run an organized report. That also saves me time filling out a tax organizer.
4. Keep a permanent file with home capital improvements. That way if and when I decide to sell I will have my house tax deductions all in one place.
5. Keep deductible medical expenses in a separate file. I was in an accident a few months ago and everything was filed together so I had it all at my fingertips when I needed to look something up.
6. Update your warranty files. The end of the year is a good time to go through your warranties file (You do have one, don’t you?) and get rid of the warranties and operating instructions for the items that broke or you sold or donated.
If your life is a busy as mine, get financially organized. It will not only give you peace of mind, it will save you time and money.
To learn more about Judy and her company, check out her website here. She also offers great tips on Facebook and Twitter.