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 papers by theme
This is a must. Having a list of categories to sort your documents into will make it easier to find what you need. Here’s what that list looks like:
- Annual statements
- Transaction notices for securities and investment funds
- Term deposit and savings bond certificates
- 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
- Receipts for purchases with warranties
- Account statements
- Lease/purchase agreements and any repair invoices
- 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.
- Personal inventory of assets
- Power of attorney / protection mandate
- 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
Tackling all your paperwork is a good opportunity to talk to your advisor, over the phone or in person, 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 times to reduce your consumption.
Figure out what you can scan:
- Home improvement receipts
- Personal inventory of assets
- Tax returns
See what’s already available online on AccèsD - This link will open in a new window.
- Statements - This link will open in a new window. for your accounts, credit cards, guaranteed investments, term savings, Desjardins Funds and brokerage accounts
- Tax slips
- Auto and home insurance policies
- Budget - This link will open in a new window.
Figure out what you can automate
- Making regular bill - This link will open in a new window. payments
- Contributing to your savings - This link will open in a new window. and investments
- Backing up your information on your hard drive or 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, use a shredding company or take advantage of the shredding services organized by some caisses.
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. You might find some non-essential expenses or a better option 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.
- Review your insurance. Do you still need as much as you did when you first purchased it? If your kids are grown and you’re nearing retirement, probably not. And if you took out your home and auto insurance years ago, check that it 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 - This link will open in a new window. or Ontario - This link will open in a new window..
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!
1. Province of Quebec only.