When it comes to good financial management and planning, proper record keeping is almost as essential as money.

You need easy access to the right records at the right time to effectively plan your financial affairs for tax purposes; to claim insurance benefits in the event of fire, accident or death; to confirm title to property and for other legal purposes; and to resolve any questions or problems that may arise with vendors or creditors.

Start by grouping your documents into two broad categories: important papers for long-term safekeeping, and current documents to be retained for anywhere from a few months to as long as six years, in the case of tax-related documents.

It's smart to store important papers for long-term safekeeping in a safety deposit box. Some of these documents you'll want to keep for life: certificates of birth, marriage, divorce, death, adoption, wills; citizenship and immigration papers, diplomas and school certificates. Other documents you'll want to keep as long as they are legally valid: insurance policies, deeds, investment securities, partnership agreements, a detailed list of your credit cards, and the like.

A detailed inventory of all your valuable household effects - furniture, art, jewelry, books, and clothing - can also be kept in your safety deposit box. Use photographs to help compile such an inventory.

Your more current documents will include such items as your cancelled cheques, bank statements, credit card statements, sales receipts for major household purchases and services, warranties, and tax records, including proof of expenses and other deductions claimed.

You're required to keep your tax records for six years, and be sure to include all the necessary related documents. Cancelled cheques and bank statements, for example, should probably be kept for six years to back up your tax returns.

If you're allowed to deduct all or part of your telephone or car expenses, or rent for an office in the home, you'll need to keep telephone, car, utility bills, and mortgage interest payments for six years. One year is generally long enough to keep most other records, but there are exceptions, so hang on to anything you think could be useful - warranties or instruction booklets, for example.

Exactly how you set up these files will, in large measure, be determined by the system you use to plan and administer your household budget.

You'll find valuable help and advice in arranging both the important papers in your safety deposit box and your home files from a booklet available free from the Canadian Life and Health Insurance Association.

The booklet, The Shoe Box Guide, contains an inventory for organizing and recording personal documents. You'll find that it provides a good start in organizing your financial records.

To obtain your copy write to the Canadian Life and Health Insurance Association Inc., Consumer Assistance Centre, 1 Queen Street East, Suite 1700, Toronto, ON, M5C 2X9.

Yours truly,

Tactical Asset Management, Inc.
phone: (306) 757-2121
fax: (306) 347-3655
e-mail: inquiry@tacticalassetmgmt.com
website: www.tacticalassetmgmt.com