Paperwork can be exhausting, but doing a deep clean gives you a better picture of your situation so you can manage your finances better.
Angela Iermieri, a financial planner at Desjardins, lays out the 3 steps to help you get your papers and finances in order, slowly but surely.
Step 1: Sort your documents by category
This is a must. Having a list of categories to sort your documents into will make it easier to find what you need. To help you start off on the right foot, here are some ideas for categories:
Investments
- Annual statements
- Transaction notices for securities and investment funds
- Term deposit and savings bond certificates
If you have multiple properties or non-RRSP / non-TFSA investments, it’s important to keep all the related documents (such as proofs of purchase, work invoices and securities transaction notices) to determine the capital gain on resale, sometimes years later.
Taxes
- Tax returns and notices of assessment: The Canada Revenue Agency recommends keeping them for at least 6 years, but it doesn’t hurt to keep them for 10
- Deductible receipts (including donations, medical expenses, daycare or daycamp, kids’ and seniors’ activities1
Consumer goods
- Receipts for purchases with warranties
- Account statements
- Lease/purchase agreements and any repair invoices
Family
- Cohabitation agreement, marriage contract, birth certificates, divorce or legal separation decree, loved one’s death certificate, passports, etc.
- Documents for your children (like vaccination records, daycare contracts and report cards)
- Employer pension plan statements. You should keep any documents from former employers in a safe place so you don’t miss any pension payments you might be entitled to.
Estate
- Personal inventory of assets
- Power of attorney / protection mandate
- Will
- Insurance policies (health, life, home, auto, etc.)
- Mortgage contract and discharge
- Property purchase agreements
“Miscellaneous” is not a category! Every document should relate to a theme.
Review your finances with your advisor
Now that you’re tackling all your paperwork, this might be a good time to talk to your advisor about any changes in your personal or financial situation. Events like a new job, early retirement, illness or separation can impact your retirement plan, investment strategy or overall financial planning.
Step 2: Cut down on paper
Drowning in paper? Here are some tips to reduce them.
Figure out what you can scan:
- Warranties
- Home improvement receipts
- Personal inventory of assets
- Tax returns
See what’s already available online on AccèsD
- Statements for your accounts, credit cards, guaranteed investments, term savings, Desjardins Funds and brokerage accounts
- Tax slips
- Auto and home insurance policies
- Budget
Figure out what you can automate
- Making regular bill payments
- Contributing to your savings and investments
- Backing up your information on your hard drive or the cloud
Smart moves for saving documents
Consider keeping 2 hard copies of your documents in 2 different locations, like your home and a safety deposit box at your financial institution. Another possibility: keep a first backup copy on hard disk and a second in the cloud.
Figure out what you can combine in one place:
- Your accounts
- Your investments
- Your insurance policies
When you’re done, you’ll have a lot more space in your decluttered drawers.
Destroy any papers you don’t need
Shredding is the most secure way to destroy documents containing personal or confidential information. You can buy a shredder, hire a shredding company or take advantage of the shredding services that some caisses offer2.
Step 3: Manage your finances effectively
After sorting through your piles of paper, you’ll have a clearer view of your situation and be able to make better financial decisions.
- Review your budget and financial structure. Try our online tool to help you see things more clearly. You might discover some non-essential expenses, ways to save or better solutions for paying off your debts.
- Centralize your accounts and consolidate your investments to make them easier to manage. Make sure you’re aligned with your investment strategy and you stick with the portfolio diversification that meets your needs. Learn the pitfalls to avoid so you can grow your investments.
- Review your insurance. If your family or work situation has changed in recent years, feel free to speak with a financial security advisor3 to reassess your coverage needs. You can also take the opportunity to make sure your home and auto insurance still meets your needs.
- Plan ahead. Having your paperwork well organized will make it much easier for someone else to handle if you get sick, have an accident, become disabled or die. To prepare an estate inventory and a list all of your assets, use the inventory of assets tools for Quebec or Ontario.
Once you’re done organizing your files, get into the habit of dealing with your bills and other statements as soon as you receive them. Every time you get a document, ask yourself whether it can be automated, combined into a single place, scanned or accessed online. You’ll save valuable time, and next year instead of a deep clean, all your finances will need is a little dusting off!