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Lauren's Updates

The following excerpts originally appeared in the article by Catey Hill in Moneyish on March 5, 2018.

Money sends us into a panic. Organizing your finances with this checklist can help.

It’s time to spring clean your finances.

The No. 1 source of stress for Americans is money, according to the American Psychological Association. About three in four (72%) say they feel stressed about money at least some of the time, and nearly one in four (22%) say they experience extreme stress about moneyAnd that takes its toll on our mental and physical wellbeing, as those with money stress have higher rates of depression, anxiety, migranes, high blood pressure and even heart attacks.

So what can you do about your money stress? One big step in the right direction is simply to get organized about your finances, so you know where all your financial documents are kept, and what to keep and what to toss, experts say. Nick Holeman, a certified financial planner at investing app Betterment, says that it’s key you do this both for your own sanity — it’s hard to feel in control when you’re living amidst stacks and stacks of financial papers –and because it helps you make smarter money decisions around what you’re saving, investing and spending. “People who are aware of what is going on with their finances tend to make better financial decisions,” he notes.

The good news: You can ditch paper almost entirely if you like, says Holeman. Mark Durrenberger, the author of The Modern Day Millionaire, stores copies of many of his financial documents electronically on Dropbox ; Holeman recommends OnePassword and DropBox. If you’re more old school, Jennifer McDermott, a consumer advocate at finder.com, says you can keep documents in both a fire and flood-proof filing cabinet and in a spot like Dropbox.

So what should you keep — and for how long — and what should you toss? This handy checklist can help:

  • Year-end investment statements. Lauren Klein, a financial advisor and owner of Klein Financial Advisors, says you should keep these for a year or until the new statement comes out. (These are also typically online for you at the investment firm.)
  • Tax-related documents. Durrenberger says that you should keep full records of all tax related documents — including “W-2s from an employer, documentation of any itemized or business expenses, 1099s from bank or investment accounts, etc. — for about 7 years. While, in general, “the IRS has 3 years after you’ve filed to challenge anything on your return” … there are circumstances where they can ask about older returns, so “to be on the safe side I recommend holding tax related items for 7 years,” he says. Klein adds that you should “keep tax forms for retirement accounts such as IRAs until seven years after the accounts are fully depleted.
  • Home-related documents. “Keep deeds, titles, and receipts for your home, including purchase price, mortgage receipts, and major improvements for as long as you own your home,” says Klein. “If you sell your house at a profit of $500K or more, certain expenses may help lower your tax bill. (You can toss these docs three years after selling your house.)”
  • Stock purchase or inherited stock documents. “Keep stock purchase records that show the initial purchase price for individual stocks and mutual funds so you can calculate your basis when you sell them,” says Klein. “Keep records of inherited stocks or funds, including the value on the day the original owner died so you can calculate your basis when you sell them.”


Click here to read the full article on Moneyish.com


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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >