How To Finally Organize Your Financial Life

If something happened to you, would your family know where to find all their vital information? This includes their documents, passwords to accounts, and important contact information. If not, it's time to finally organize your financial life. Putting in the time now to get organized and prepared will make life easier on you and your family down the road.  

In this post, we’ll introduce you to the Financial Documents Organizer (FDO) -- the most important document you will ever complete. We'll explain what it is, why it's important, and some helpful tips for filling it out. 

The Magic of the Financial Documents Organizer 

Your financial life is a complicated mess of accounts, documents, and passwords. You may know where everything is, but if something were ever to happen to you, would your family be able to figure it out without you? You need to get this information out of your head and into one organized and accessible place. That is what the Financial Documents Organizer is for.  

At Hardy Capital, we have every client fill out a Financial Documents Organizer. If you don't already have one, you can download one for yourself below.  

The FDO has 8 sections, each for a different part of your life. In each section, the important items/documents are on the left side. On the right there is space to fill in the necessary information for each item. The information you will want to record will be different depending on each item. For online accounts, you may want to record the username and password, website url, and what email you used to sign up. For important documents, record where it is stored, and where you would go to replace it if lost.  

The most important thing when filling out the FDO is to be explicit. The FDO is a tool for others to use, so make sure everything is clear.  

Another reason we have every client fill out a FDO is because it also acts as a to-do list. As you work through the FDO you will likely come across items that you have not set up yet. These shouldn't be skipped. Instead, highlight and add them to the agenda for the next time you talk to your Financial Advisor. (Don’t have a Financial Advisor? Schedule a call here for complementary commitment-free conversation).  

How to Fill out the FDO 

Remember, as you go through the FDO, keep a running to-do list of items you come across that you haven't completed yet. For example, if you haven't created a will, when you get to that line highlight it and add it to the to-do list. 

Section 1: Key Contacts  

The first section on the FDO is for your key contacts. Here is where you will record the name and phone number of all the important contacts you have. This includes emergency contacts, attorneys, employers, and more.   

Section 2: Tracking progress  

This section is where we start tracking your important documents. It is divided into 3 sub-sections: Personal Documents (social, birth cert, etc), Ownership Documents (real estate deeds and motor vehicle titles),and Tax (last year’s tax return, property tax records).  

For each document record the “Provider contact information.” This is who you would reach out to in the event that the original was ever lost or damaged. Also record where you store the document. If the document is physical, write where it is in the house. If it’s digital write where it is stored. For Example: On My Macbook > Folder: My Documents > Birth Certificates > Filename: Emmas.BirthCert.original 

We recommended that you keep both a physical and electronic copy of all important documents. If you do, write both of their locations on the FDO.  

Section 3: Banking  

In Section 3, you’ll want to record how you receive and where you keep all your statements. Nowadays, most of this information is delivered electronically and can be found online.  You may also consider recording your login details for your various accounts.  

While you are completing this section keep an eye out for any old unused accounts that you haven’t closed yet. 

Section 4: Estate Planning  

This is the section where you may start spending more time on the to-do list than actually filling out the FDO. According to a Caring.com study, interest in estate planning services has exploded since the beginning of the pandemic, yet 2 out of 3 Americans still haven’t set up a will. Of course, there is a lot more to Estate Planning than wills. The Estate planning section is broken down into three sub sections. Insurance, Personal and Charitable Trusts, and Special Needs Trusts.  

Bonus: Don’t forget to consider what will happen to your digital assets. iOS 15.2 and above have a “legacy contact” setting that lets you specify who can access your iCloud information after you die. Read more here.  

Section 5: Investment  

In this section, record all your investment accounts and how to access your statements. 

This includes brokerage accounts, mutual fund accounts, or other managed accounts. Also, if you have physical stock certificates, record where those are kept. As you are recording all your accounts consider the following. Does your investment strategy across accounts make sense? Would you rather have someone else manage all these accounts and investments for you? Have you considered any alternate investments?  

Section 6: Retirement  

In this section, record all the necessary information relating to your retirement accounts. This includes 401(k) plans, IRA’s, and retirement plans. Once common thing to look out for is a 401(k) account at an old employer that you had forgotten about. It is usually better to roll this into a traditional IRA than to keep the 401(k) account with the previous employer.   

Section 7: Credit and Lending  

When it comes to your debt, staying organized and on top of everything is very important. In this section, you will record who your debt is with, and how to contact them. 

While you are here, you should also consider recording some important numbers. Record the amount owed, monthly payment, interest rate, and payoff date for each account. 

Section 8: Small Business  

If you run a small business, this section is for you.  

Record information on your incorporation papers, payroll records, and retirement plans. If you haven’t set up a retirement plan for you and your employees, this is something you should add to the to-do list. It can be very beneficial come tax season.  

Wrapping Up  

That’s everything covered by the FDO. Feel free to add any other important documents that aren't included. Spending a few hours completing the FDO will make your family's life much easier down the road.  

By the end of the FDO, you should also have a pretty good idea of the next steps you need to take in your financial journey. Whether that is estate planning, retirement planning, or just an investment consultation, feel free to schedule a call on my calendly to discuss.