1 00:00:00,000 --> 00:00:03,660 Ralph: I often get questions from listeners about organizing financial documents. 2 00:00:04,020 --> 00:00:08,760 Many people feel overwhelmed, trying to keep track of years and years of paperwork. 3 00:00:09,059 --> 00:00:11,790 So today I want to give you some practical guidance. 4 00:00:12,120 --> 00:00:16,740 On creating a record keeping system that works for you and keeps you protected. 5 00:00:16,890 --> 00:00:18,090 So you don't want to miss today's show. 6 00:00:48,610 --> 00:00:50,706 Welcome to our tax talk Thursday show. 7 00:00:50,706 --> 00:00:52,056 We're not going to talk about taxes today. 8 00:00:52,086 --> 00:00:54,036 We're going to be talking about record keeping. 9 00:00:54,036 --> 00:00:55,566 I'm so glad you chose to join us. 10 00:00:55,926 --> 00:00:58,146 I want to thank you for listening and supporting the program. 11 00:00:58,536 --> 00:01:08,916 I'm coming to you this morning from the Estep Farm at the Saggio Accounting studio . So I always say, let me put my podcaster on and put down the overalls and push that adding machine to the side. 12 00:01:09,396 --> 00:01:13,266 And let's get some financial wisdom from a Christian perspective. 13 00:01:13,716 --> 00:01:15,996 Today, we're diving into an important topic. 14 00:01:16,296 --> 00:01:22,236 And that's a question I get asked routinely and that's Ralph, what financial records do you need me to keep? 15 00:01:22,416 --> 00:01:23,586 Where should you store them? 16 00:01:23,766 --> 00:01:25,056 And for how long. 17 00:01:25,283 --> 00:01:28,043 Don't forget to subscribe to the show and join our email list. 18 00:01:28,043 --> 00:01:32,393 You do that at askralphpodcast.com . So you don't miss tomorrow show tomorrow. 19 00:01:32,393 --> 00:01:36,053 I'm going to be talking about maximizing HSA deductions. 20 00:01:36,053 --> 00:01:39,233 Those are health savings accounts, a great way to save on taxes. 21 00:01:39,443 --> 00:01:41,123 So you don't want to miss tomorrow show. 22 00:01:41,814 --> 00:01:43,913 Let's start with our relevant Bible verse today. 23 00:01:44,003 --> 00:01:46,643 And this comes from the NIV translation. 24 00:01:46,943 --> 00:01:50,393 It's from Proverbs chapter 27, verses 23 and 24. 25 00:01:50,393 --> 00:01:51,203 And it says this. 26 00:01:51,683 --> 00:01:57,803 Be sure, you know, the condition of your flocks, give careful attention to your herds for riches. 27 00:01:57,803 --> 00:01:59,333 Do not endure forever. 28 00:01:59,813 --> 00:02:02,093 And I thought that was really a good Bible verse for today. 29 00:02:02,333 --> 00:02:07,103 And this reminds us that we are all called to be wise stewards, what God has given us. 30 00:02:07,557 --> 00:02:12,203 Part of good stewardship is knowing the state of our finances by keeping orderly records. 31 00:02:12,473 --> 00:02:14,933 You don't know how many times I've had to work with clients. 32 00:02:15,293 --> 00:02:18,713 Who didn't have clean and clear and orderly records. 33 00:02:19,043 --> 00:02:22,403 When we systematically track income expenses. 34 00:02:22,973 --> 00:02:23,933 Assets and debts. 35 00:02:23,933 --> 00:02:26,813 We gain crucial insight into our financial health. 36 00:02:27,323 --> 00:02:28,133 Here's the deal. 37 00:02:28,343 --> 00:02:31,583 Disorganization leads to confusion and poor decision-making. 38 00:02:31,883 --> 00:02:37,013 So let's walk through exactly what you need to keep and for how long one of my clients was in a week or two ago. 39 00:02:37,013 --> 00:02:41,303 And she asked me this question, she said, besides tax documents, Ralph, what should I be keeping? 40 00:02:41,483 --> 00:02:42,653 So here's my advice. 41 00:02:42,653 --> 00:02:48,473 First, keep digital or paper copies of tax returns and supporting documents. 42 00:02:48,773 --> 00:02:53,433 This includes forms, W2, 1099's donation receipts. 43 00:02:53,633 --> 00:02:59,153 If you have a business, a business expenses, credits, and deductions and any other tax related items. 44 00:02:59,333 --> 00:03:01,313 Now the IRS recommends keeping these records. 45 00:03:01,373 --> 00:03:03,383 For seven years in case you are audited. 46 00:03:03,923 --> 00:03:07,673 Some experts say, keep tax records indefinitely for historical purposes. 47 00:03:08,003 --> 00:03:10,853 You want to store them in a safe place, like a filing cabinet. 48 00:03:11,173 --> 00:03:13,223 a, safe or on the cloud storage. 49 00:03:13,373 --> 00:03:19,193 One of the things we offer our clients is we have a product called smart vault where we actually store those things into cloud. 50 00:03:19,493 --> 00:03:21,503 But so the IRS recommends seven years. 51 00:03:21,503 --> 00:03:23,363 I think that's a pretty good way to keep track of them 52 00:03:23,363 --> 00:03:23,813 next. 53 00:03:24,203 --> 00:03:26,063 Bank and investment statements. 54 00:03:26,573 --> 00:03:30,803 These help track income spending and savings patterns over time. 55 00:03:31,133 --> 00:03:37,973 You want to keep at least three years of monthly statements, either in digital or printed format, don't rely on the banks to store those for you. 56 00:03:38,183 --> 00:03:41,453 You want to download those and bring them on to some kind of storage device for yourself. 57 00:03:41,693 --> 00:03:45,503 And if you have the room seven years is even better for analyzing longterm trends. 58 00:03:46,163 --> 00:03:48,053 Now let's talk about medical receipts. 59 00:03:48,353 --> 00:03:54,833 So I advise you keep medical receipts from doctors, hospitals, dentists optometrists and other healthcare providers. 60 00:03:55,313 --> 00:04:02,063 Especially if you've used these as tax deductions or for insurance claims again, I would recommend keeping these things for seven years. 61 00:04:02,063 --> 00:04:03,653 That's what's mandated by the IRS. 62 00:04:04,343 --> 00:04:06,863 Now we'll talk about utility bills and credit card statements. 63 00:04:07,103 --> 00:04:09,443 They also paint a picture of your spending. 64 00:04:09,623 --> 00:04:15,913 I would recommend just, like I talked about bank statements, Keeping at least three years worth of monthly statements to compare costs over time. 65 00:04:16,633 --> 00:04:18,613 Again, if you want to store these in the cloud, that's fine. 66 00:04:18,613 --> 00:04:22,453 Just don't rely on the banks for their going back and look at your statements. 67 00:04:22,693 --> 00:04:24,193 Now how about major purchases? 68 00:04:24,313 --> 00:04:31,123 So here's what I say about that for purchase receipts on major items like vehicles, electronics, appliances, furniture, et cetera. 69 00:04:31,753 --> 00:04:32,293 Here's a deal. 70 00:04:32,323 --> 00:04:44,593 Keep them until you dispose of them in case you need to make a return or a claim actually had this situation not too long ago, with something I had bought and I had to go back and find the original receipt, which was a challenge, but guess what? 71 00:04:44,623 --> 00:04:47,683 I'm a little anal retentive and a little bit OCD. 72 00:04:47,683 --> 00:04:49,333 So I actually scan in all the receipts. 73 00:04:49,363 --> 00:04:51,043 Here's another thing a lot of people don't think about. 74 00:04:51,493 --> 00:04:56,563 You want to keep track of your paycheck stubs, that will show what you paid and what was withheld. 75 00:04:56,563 --> 00:05:00,013 And I would recommend keeping those for a year for tax purposes. 76 00:05:00,163 --> 00:05:02,173 But if you got room three years is even better. 77 00:05:02,323 --> 00:05:05,083 That way you can always compare your year end. 78 00:05:05,473 --> 00:05:09,133 Final pay stub with what comes out on the W2 forms. 79 00:05:09,253 --> 00:05:12,193 Now, once you filed your taxes, you could probably toss those things. 80 00:05:12,883 --> 00:05:13,483 Here's another one. 81 00:05:13,483 --> 00:05:22,453 A lot of people don't think about, and that's insurance policies for your home, for your auto, for your health, for disability, for life insurance, they should be kept until they expire. 82 00:05:22,453 --> 00:05:27,073 So those life insurance policies you want to keep on to those for as long as you have that policy. 83 00:05:27,733 --> 00:05:32,353 Holding on to expired policies for one to three years can also help resolve claims. 84 00:05:32,563 --> 00:05:37,473 There are some times when you had to go back, even when, insurance has been changed or canceled or ended. 85 00:05:38,043 --> 00:05:47,673 Estate planning documents like wills trusts, power of attorneys are crucial to keep updated, but more importantly, stored securely until they're no longer valid. 86 00:05:48,063 --> 00:05:51,213 You want to share these copies with executors, but keep original safe. 87 00:05:51,453 --> 00:05:53,523 A few months ago, I did an interview with an attorney. 88 00:05:53,523 --> 00:05:54,963 We talked about this very issue. 89 00:05:54,963 --> 00:05:56,373 You might want to go back and relisten to that. 90 00:05:56,733 --> 00:06:01,173 But if you have these estate documents, you want to keep those for as long as they're still valid. 91 00:06:01,173 --> 00:06:04,713 Now, if you go and get new documents done, You want to destroy the old ones? 92 00:06:05,063 --> 00:06:07,503 Another thing You want to keep track of your retirement plan statements. 93 00:06:07,713 --> 00:06:09,393 These can help you track pensions. 94 00:06:09,753 --> 00:06:21,093 401ks IRAs and other accounts, you want to keep these annual statements and until you cash out the accounts and believe me, I've even seen situations where we had to go back to a original. 95 00:06:21,363 --> 00:06:26,373 Years when a client had a IRA and go see what the original contributions were. 96 00:06:26,373 --> 00:06:27,223 So it was very helpful. 97 00:06:27,223 --> 00:06:31,473 They had those statements Finally documentation on home purchase, including the closing statement. 98 00:06:31,473 --> 00:06:34,713 That's what you get from the attorney or from the closing title company. 99 00:06:34,713 --> 00:06:41,763 When you go to settlement, you want to keep those mortgage contracts And payment records should be kept until you sell or pay off the property. 100 00:06:41,763 --> 00:06:41,973 That way. 101 00:06:41,973 --> 00:06:47,103 If you ever get into an issue where they have to look at your credit and go back and pull those receipts, 102 00:06:47,493 --> 00:06:51,453 storing all these original hard copies can take up a lot of space over time. 103 00:06:51,453 --> 00:06:52,683 It's funny, a few years back. 104 00:06:52,983 --> 00:06:57,483 I had a client that said, can I deduct on my tax return, the cost of a storage unit? 105 00:06:57,573 --> 00:07:04,683 And actually I looked it up and you could, so I recommend dedicating a safe filing cabinet or fireproof, safe to organize financial records. 106 00:07:04,683 --> 00:07:05,613 You can pick one of these up. 107 00:07:05,613 --> 00:07:06,873 They're not that expensive. 108 00:07:07,353 --> 00:07:13,533 And then once you do that, you want to use files and folders to label group items clearly by year and by category. 109 00:07:13,533 --> 00:07:22,173 Now another option you can do in this something I do personally, you can scan the documents to create digital copies on your computer on an external hard drive or secure cloud account. 110 00:07:22,473 --> 00:07:33,123 You may want to keep them in two spots that way, if one of those accounts gets corrupted, you can go find it and just be sure this is really important to pass or protect your devices and online accounts. 111 00:07:33,153 --> 00:07:35,283 You don't want somebody snooping into this information. 112 00:07:35,343 --> 00:07:35,823 Remember. 113 00:07:36,393 --> 00:07:39,783 Keeping good records demonstrates stewardship and wisdom. 114 00:07:40,233 --> 00:07:44,193 But don't become obsessed or anxious about it don't become like me like OCD about it. 115 00:07:44,193 --> 00:07:45,273 You'll drive yourself crazy. 116 00:07:45,723 --> 00:07:49,533 Do the best you can to save important documents without accumulating clutter. 117 00:07:50,043 --> 00:07:57,663 Focus on what you need to keep for potential taxes in the event that you get audited, maybe you have an insurance claim or for legal purposes. 118 00:07:57,693 --> 00:07:58,953 It's really that simple folks. 119 00:07:59,283 --> 00:08:06,513 So before we wrap up I want to remind all of our listeners to visit our podcast page, you do that askralphpodcast.com . There you can leave us a review. 120 00:08:06,843 --> 00:08:10,533 Share your thoughts, or even send us a message with questions for future episodes. 121 00:08:10,983 --> 00:08:14,403 As I mentioned the last few days, we're building our catalog we're future episodes. 122 00:08:14,403 --> 00:08:17,913 If you've got an idea that you want me to cover on the show, I would love to hear from you. 123 00:08:18,233 --> 00:08:23,283 While you're there, make sure you join our email list so we can send you our daily email with what's going on with the show. 124 00:08:23,793 --> 00:08:27,003 A lot of my clients and a lot of our listeners love to get that daily email. 125 00:08:27,303 --> 00:08:33,333 You can also schedule a consultation if you've got some specific questions to talk about either finance or record keeping. 126 00:08:33,663 --> 00:08:36,273 And if you know someone who has questions about record keeping. 127 00:08:36,843 --> 00:08:38,703 And some basic guidelines for hanging on that. 128 00:08:38,703 --> 00:08:41,853 Do me a favor and share this episode and share the program with them. 129 00:08:41,853 --> 00:08:43,353 As we try to grow our audience. 130 00:08:43,633 --> 00:08:45,943 I'll wrap up today's episode with a quick recap. 131 00:08:46,723 --> 00:08:49,993 Keep tax records and supporting documents for a minimum of seven years. 132 00:08:49,993 --> 00:08:51,283 That's what the IRS recommends. 133 00:08:51,823 --> 00:08:54,943 Save three to seven years of bank and investment statements, 134 00:08:55,243 --> 00:08:57,433 medical receipts should be kept for seven years. 135 00:08:57,733 --> 00:09:01,153 Keep three years of utility bills and credit card statements. 136 00:09:01,483 --> 00:09:05,563 And as I mentioned, hold on to major purchase receipts until you dispose of the item. 137 00:09:05,953 --> 00:09:08,683 Retain paychecks stubs for one to three years. 138 00:09:08,983 --> 00:09:11,563 Don't toss insurance policies until they expire. 139 00:09:11,953 --> 00:09:16,153 And securely store estate planning documents until they become invalid. 140 00:09:16,453 --> 00:09:19,933 And again, keep retirement plan statements until you cash out the accounts. 141 00:09:20,323 --> 00:09:24,973 And hold on to that home purchase paperwork until you sell or pay off the mortgage. 142 00:09:25,273 --> 00:09:28,603 If you sell your home, there may be a tax ramification to that. 143 00:09:28,603 --> 00:09:30,283 So you're going to need that original paperwork. 144 00:09:30,433 --> 00:09:32,413 That's one of the things that a lot of my clients struggle to find. 145 00:09:32,953 --> 00:09:36,043 So strive to be organized, but don't become overwhelmed. 146 00:09:36,313 --> 00:09:40,033 It's easy to become overwhelmed with this focus on saving anything tax. 147 00:09:40,333 --> 00:09:49,363 Or claim related along with those estate and retirement planning documents, Key papers, tidy and secure and scanning is preferred just for space reasons. 148 00:09:49,663 --> 00:09:54,013 I hope these record keeping tips empower you to gain clarity and confidence in your finances. 149 00:09:54,403 --> 00:10:00,643 Allowing you to exercise wise stewardship again, please visit askralphpodcast.com . For more great content. 150 00:10:00,703 --> 00:10:02,593 I'm a little biased because I'm the one that creates it. 151 00:10:03,043 --> 00:10:07,363 And be sure to share this episode with anyone who might benefit from learning how to organize their financial records. 152 00:10:07,363 --> 00:10:12,163 And as I always say, stay financially savvy, and God bless you today.