WHY IGNORANCE IS NOT BLISS (When it Comes to Organizing Your Financial Paperwork)
Most of us have a great need to avoid unpleasant thoughts and tasks, and certainly thinking about our own mortality ranks high on the list of unpleasant thoughts. Add that to the fear that many of us have about whether we’ll have enough money as we age, and it’s not hard to relate to a desire to “bury our heads in the sand”, rather than thinking about organizing our financial paperwork.
However, like many unpleasant tasks, doing them in small pieces is easier than taking on the whole job in one sitting. Hopefully the anticipated satisfaction of getting it done will outweigh the fear of getting started. And the added bonus is the knowledge that your spouse, your kids, your executors, will not be stressed by trying to figure out where the information is that they need.
To move from ignorance to organization, you need to:
- Find out what you own and what you owe, and where it is
- Create a comprehensive Financial Summary Sheet, listing all your debts and assets, (mortgages, lines of credit, credit cards, bank accounts, pensions, investment accounts, insurance policies, etc.) including the account numbers, and location of each
- Create a Contact list - Review your financial summary sheet, and add in a column for contact info - names, phone numbers, email addresses, of the person who manages this for you.
So, how to begin?? First - set a timer for 30 minutes. Many of us don’t start to do difficult tasks because we think they’ll take a long time and we just don’t have the time. So,setting a timer, and then sitting down for 30 minutes on a few different occasions to get the job done is actually much easier than feeling you have to do it all at the same time.
- Start by opening your on-line banking access. List every account you see there, including the bank accounts, credit cards, mortgages, lines of credit, etc. Do the same for every institution that you bank at.
- Next, repeat the same with every institution that you have investments with. This will include your pensions, your TFSA’s, and your investment accounts.
- Now, tackle insurance - You may have a variety of different insurance policies, including life, critical illness, disability, for example. If you can’t find the policy numbers, don’t stress about it - contact your insurance agent and they can send you the whole list.
- Debts - You may already have listed many of these as for some people your mortgages/lines of credit may be at your bank. If you have any loans at other institutions, list them now.
- Other information - we all have additional personal information that will be useful to have listed on a summary sheet - both for our own organization, and to help out those who may need to help us. Add it to the list.
- Business information - if you are a solo entrepreneur, it means that often the whole memory of your business rests in your brain. Take this opportunity to organize your business documentation as well, from assets to debts, to the contact information for the professionals who have assisted with setting up all your systems (lawyers, accountants, business advisors, etc.)
Most of us also have dozens of passwords that allow access to all of our information. Whether you use a one password system, or have individual access to each of your online accounts, it’s important to both have a record of these passwords, and to insure that at least one person knows where this record is. You can keep a hard copy, you can encrypt a copy, you can keep an online list - but keep it safe. This means don’t name the file “Complete Contact List and Passwords”! I generally suggest labeling it with a completely innocuous name that would be of no interest to anyone - the name of your childhood pet, your high school, a favourite item - something that you’ll remember, but no one else will care about.
As you work your way through all of this, I suspect you’ll find that you know more than you thought you did about your financial paperwork. It’s just that you’ve never pulled it all together in one document before. And, I can promise you that having completed this organizational feat, and knowing what you own, what you owe, and where it’s all located, you will feel confident that you have the information you need to feel in control of your financial life, regardless of what direction your life may take!
Debbie Shawn, founder of Divorce Matters, is a Registered Social Worker with the Ontario College of Social Workers. Debbie has a Master of Social Work degree from Wilfrid Laurier University, is on the Board of CAWEE (Canadian Association of Women Executives and Entrepreneurs), and is a member of the Professional Organizers of Canada. Debbie has over 25 years of business experience, and has helped many people through a variety of stressful situations. She understands how to present the information your legal team needs in a clear, concise format. Contact Debbie for more information email@example.com.