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We're looking at all of the ways that you can spring clean your finances and set yourself up with good financial habits for the rest of the year. Today, we're focusing on organizing your financial paperwork.

One thing that can feel like a very daunting task. So here with more is Grant Gallagher, who is the Affinity Federal Credit Union Director of Financial well-being and Brand Communications. Grant, good to have you here with us. Uh, you have a bunch of great tips for people here. So we got to know how can they start to create a financial filing system to keep themselves organized?

Thanks for having me, Brad. Uh, yeah, obviously, people don't get very excited when we're talking about doing your financial paperwork tidying up. Um, most people, they don't really have a system in place and that's really the first thing they need to think about. They need to create a system, they need to organize it by category, you know, um, you need to involve anybody in your family who's part of that conversation. Um, obviously, if your documents are locked up in a fireproof safe and they need to get access to it, but you're at work, uh, it's not going to work for your entire family. So having that conversation and kind of figuring out those first steps is where you need to start.

What's the decision tree as well for documents that you should keep versus shred versus digitize even?

So, I'm a big proponent of you should really digitize everything that you can. Um, you know, it's very little effort to have a uh, digital file and then you get the benefits of you can potentially, uh, search for it. You can, uh, get some additional benefits there. Um, but you know, it really depends on what sort of document you're talking about. When we're talking about, um, you know, your tax related paperwork, those have a much longer shelf life. You know, those you want to keep on file for quite some time. Um, if you are going to look at something like a bill, you know, bills that that have been paid, you can usually, you know, get rid of those immediately. Bank statements, those have a little bit of a longer shelf life, you know, you're going to want to keep those around for a year, unless you need them for some sort of tax purposes. Um, pay stubs are also generally only useful as a backup to your W2 at tax time. Um, but unless you're self-employed or have really complex taxes, then, you know, you need to keep those longer.

Then of course,

Sorry, go ahead.

Yeah. Um, then of course, if if you have any sort of insurance policies, you know, you want to keep your active policy on hand and accessible, but anything that's expired, um, or renewed, you want to keep it around for three years, you know, just in case of disputes, claims or or legal issues.

So that starts to answer the question of how long you keep certain documents, but also here when you're thinking about the importance of a financial emergency binder, it seems like there are certain documents that should go in that binder, stay in that binder for as long as necessary. What goes in there and the preparedness of that binder?

Yeah, that that that's a great point. Um, I don't think a lot of people have an emergency financial binder and they they absolutely should, because the last thing you want during a crisis is have to be digging around to try to find all these papers. Um, things that are important to go in there is loans and credit card account numbers, housing and utility account numbers, insurance information, identity papers, property titles, uh, tax and employment records, of course, medical information is important, um, wills and power of attorney, and then of course, you want to have your emergency contacts, you know, your your doctors, the schools, the utilities, um, as well as any sort of passwords for computers and accounts. You know, these are all things that you don't really think about and you might have trouble remembering if you're in a crisis situation.

And then last but not least, uh, I always recommend that people make copies of the front and back of their debit cards and credit cards, because they put that number nice and conveniently right on the card, um, but when it's lost and stolen, it's not so convenient that it was on the card and not in your wallet or, or, uh, having a copy of it.

You know, we're just a couple weeks out from tax day. Maybe people had a tough time organizing all their files this year. What do you advise for people to get ahead for next year's tax season?

Yeah. I mean, now is the time to learn from your lessons and your mistakes from this year and start now, you know, put together a folder now of what a place where you can put these documents. Um, it's a good opportunity to, you know, think about what did you miss, what did you have to dig for, um, and take advantage of that. Start putting your donations in that folder, um, start thinking about how you can better organize it, because again, you don't want to be tempted to have some important document and just stick it in a pile for later. Um, a lot of us kind of get lazy about that, but do your future self a favor, create some sort of filing system for next year now. Um, and then you know, you won't have to worry about it and it'll be a much smoother tax season next year.

And so with that in mind, how do you see a lot of the older generations kind of passing down their tips for which files they need to be keeping versus digitizing to that next generation that are digital first?

Yeah. Um, you know, there there is a little bit of a a challenge there with somebody who's traditionally a paper first individual. Um, you know, you can, you can help them out by helping scan them, helping teach them how to do these things. Um, but of course, you know, if they're sticking to a a paper first file, they should really make that their plan. Uh, you shouldn't have do half paper, half digital. That's just going to lead to some scenarios where you're digging around looking for a paper, um, because you thought you digitized it, but you didn't actually do it. And I am speaking from personal experience here.

Grant, thanks so much for taking the time here and for sharing the personal experience as well. Appreciate.