Talking about storing documents, paper stock, and other documentation you need for specific purposes is not the highest on my list, and I\’m sure it\’s not on yours. However, it\’s important because going through the process to store documents properly will set you up for success.
That\’s why I wanted to discuss a process related to dealing with documentation and building that margin in your mind so that you\’re not getting distracted by paperwork.
It can be so easy for our minds to get distracted by something seemingly unimportant when it comes to documentation. When I sit down and talk through personal finance with people, typically, what comes up is how to store documentation, figure out what is essential to keep, what can be discarded, and how long to keep certain documents.
So, I typically take a three-prong approach when looking at what to do with that documentation and how to improve that process for them.
That process comes down to auditing, automating, and augmenting.
1.) Auditing
You need to begin by looking at where these documents are located and where they are stored. Whether it\’s a safety deposit box, a safe, in a box, or up in the attic, gather all these documents together and figure out what is necessary and what is not.
The audit process looks at the state of the union, pulling everything together, figuring out what\’s essential and what isn\’t. I would encourage you to go through the process of looking at all the documents that come in the door. Hopefully, you\’ve been able to go paperless with many areas, but if you\’re anything like me, I get a ton of mail even though I have paperless statements for the majority of my accounts.
You\’ll want to pull all those together to figure out what is essential and what isn\’t.
2.) Automate
The second component comes down to automation. When you\’re trying to automate your documentation, you\’re trying to figure out an excellent process, so you don\’t have to think about this again and don\’t end up with a stack of papers that have to be purged after a certain period because they weren\’t addressed along the way.
When looking at your finances, you may utilize the mechanical component in setting up auto-pay for your credit card for your utilities or figuring out how to streamline those aspects of your finances. I took the approach of looking at a 12 theme annual approach towards revamping your personal finances to build in a level of automation to build in a systematic approach so that you\’re dealing with or working through a specific component of your personal finances every month.
When it comes to documentation, we\’re trying to figure out a system that you can follow to know what needs to be kept and what needs to be purged.
3.) Augmenting
The third component comes down to augmenting. The purpose of augment is really to have the audit from the standpoint of knowing where you\’re at with automation and having systems in place and then growing, adding to, and expanding upon the knowledge and resources you have.
Growing those resources is focused at the augment level where you have the proper systems in place, which you can then duplicate into various areas of your life.
Applying these three components to organizing your documents, let\’s look at some examples of how this would feasibly be carried out.
Critical Documents
First, let\’s look at critical documents you need to keep on hand and in your immediate possession. Whether it\’s locked in a security deposit box, a safe, or in a legacy box, have it in a specific location where you know where to locate it if you need it.
These critical documents may come down to a deed for your home, a title for your vehicle, a birth certificate, a social security card, a marriage certificate, or documents for a specific loan.
Typically, these documents have a wet signature, meaning they are not a copy but the original and have a seal of approval or signature from another party.
You want to keep these documents so that if you ever need them, you don\’t have a copy or a scan of the document that may not pick up the intricacies of that document.
Important Documents
There will be specific documents that are important but not necessarily critical. For these, you\’ll want to have an excellent source to save those to an external hard drive or online drive like Google Drive to scan those leases, purchase agreements, or other documents into specific folders if you need to pull those agreements up.
Receipts
You may also have documents that are not critical but are important since they track a purchase. An example of this may be a receipt. You may have a receipt for a business expense or a personal purchase associated with a warranty.
I would encourage you to scan those into that same external hard drive or Google Drive to have a file for those specific receipts.
Several different expense software options allow you to upload the receipts and keep an actual record of those receipts. If you have one of those, you may be able to use that in its absence, but overall it\’s essential to keep those receipts.
Have a Process
Much of the difficulty in this comes down to having a process. If you know that you have critical documents, you\’ll be able to identify what things you need to have from a physical standpoint, what items you can upload online, and what you can shred because you don\’t have a future use for them.
Doing this has been especially difficult for me because I work from home and have documents from the company I work for, my businesses, and my expenses.
In each of those areas, it is essential to have separate files in separate locations and that they have a different level of compliance necessary to have that proper documentation.
I would encourage you to look at your world and become familiar with the documentation process you need to follow to be consistent with how you file things going forward.
Legacy Box
Something that helped me on the personal end of figuring out where to store critical documents came down to a legacy box.
I hired someone through Etsy to build me a legacy box. Its purpose is to keep those critical documents stored in a single place that can be kept in a safety deposit box, in a safe, or another secure location. It\’s essential to have some central location for your documents so you can communicate to loved ones what is in that box and where it\’s located. In the event of your passing or you enduring a significant health event, they will know where to locate it and find the critical information they may need.
Set a Deadline To Get Organized
The final component of having a system is setting a deadline when documents and receipts must be either categorized or thrown away. You may want to set it up to where you have three days from when that mail shows up for it to be organized, saved on your hard drive, stored in your legacy box, or shredded. Otherwise, over seven or 30 days, you\’ll end up with more documents than you desire to have.
Staying organized allows you to automate the process along the way and figure out a system for uploading these documents to have them available to you when you need them without becoming an enormous burden to find them. I believe that clearing up your documentation will help clear mind space, which will give you the margin to think about and focus on the things that do matter.
Call To Action
Today, my call to action is to do precisely that and audit your documentation to determine whether you have a solid system for those critical documents to be stored.
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