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Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
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Overview

Extra paperwork and less time to take care of it are often a part of life with a serious illness. To minimize the amount of time and energy you have to spend on paperwork, it is worthwhile to set up a home filing system. Once it's set up, a good filing system will help you stay on top of bills and personal matters with a minimum of effort.

There is no right or wrong way to set up a filing system. The two keys to a good filing system are:

  • Use your system consistently.
  • Make it easy enough for other people to understand it in case they need to access papers or pay bills for you. Consider attaching to your files a summary of how the system works in case someone else has to use your system if you can't or if you're traveling.

Rather than be overwhelmed by trying to get totally organized at once, decide which areas are most important to organize. Then set time lines for each area in order of priority.

If you do not have a filing system, we describe three easy ones in the other sections of this article. The first divides your files into "active" and "inactive." The second is a simple "Shoe Box" method. This third is an even simpler "In/Out" Box method.

Once you have a system, the next question is what files to keep, and which to discard. For instance, keep tax records for the last three years. On the other hand, get rid of expired warranties.

If you would prefer someone else to handle your bills and other personal matters for you, consider asking a friend or family member. If no one is available, consider hiring a Daily Money Manager.

For ideas about how to organize dealing with medical bills, see: Keeping Track Of Your Claims For Medical Bills: A Simple Method.

Active/Inactive Files

One simple filing system is to divide your files between Active and Inactive.

Active Files

Living with a current or history of a health condition means completing forms over and over again. It will save you a lot of time and energy if you pull together the information you'll need for the forms, and to keep your life together, into one "active" file.

Your active files should also include:

Financial Information

  • Income Tax Returns - for at least three years, with the supporting documents used to prepare the return.
  • Banking statements, including Checking, Savings, CD and Money Market Funds for the past year.
  • Stocks, Bonds, and Brokerage Account Statements for the last year.
  • Canceled Checks for the past year.
  • Receipts for the past year.
  • Records of Loans or Other Debts With Schedule of Payments.
  • Employment Record / Resume.
  • Education Record / Diplomas.
  • Passport.
  • Your Social Security Card.
  • Copies of all current Insurance Policies, including Life, Disability, Health,Automobile, Property and Liability.
  • Health Records and Information concerning Your Health.
  • Copy of Your Will, see Storing and Updating Your Will.
  • Copy of Your Living Will, see Living Will.
  • Copy of Durable Power of Attorney, see Durable Power of Attorney.
  • Copy of Health Care Power Of Attorney
  • Cemetery Deed - a copy will do. Store the original in your safe deposit box or a fireproof file.
  • Instruction Books and Guarantees for Appliances and other household items.
  • Employee Benefits Booklets.
  • A Copy of Your Household Inventory.
  • Funeral plans and final requests
  • Your Instruction List.

Inactive Files

Review your files annually. Move documents older than three years into a separate place or box if you're tight on space.

Legal documents such as your Living Will and other Advance Directives should not be moved out of the active file even if they were drafted more than three years ago. Still, even if you're not going to move them, it's a good idea to review your legal documents during your annual clean-up to see if you want to make any changes.

The "Shoe Box" Method Of Filing

One simple filing system is the "shoe box" method, which involves five separate boxes (or files) and a fireproof box for essential documents. This method can work particularly well if you are having trouble staying on top of things and/or receive government benefits:

  1. Current Bills Put new bills here. As they are paid, move to Box #2.Consider organizing this "box" into smaller folders corresponding to the day in the month the check should be written.

 

  1. Paid Bills and financial obligations, including general bills and invoices, credit card statements, and receipts.

 

  1. Bank Accounts All bank accounts, including statements and canceled checks.

 

  1. Medical Expenses and Reimbursements. See Paying Medical Bills.

 

  1. Government Benefits Keep all documents relating to benefits you receive here. Make a separate file for each program, including copies of all application forms, supporting documents, award letters, notes on conversations (including to whom you spoke and the date,) and all correspondence. Never give any government agency the original without keeping a copy in this file.

 

 

Fire Proof File or Box includes items such as: Employment & Education Records, Passport, Your Social Security Card, Copies of All Insurance Policies, Will & Advance Directives, and Funeral Arrangements.

 

 

The In/Out Box Method

Another way to handle bills and paperwork is through an in/out box. This could be an actual office-type set-up with two baskets, or perhaps two shelves on your desk.

To use this method:

  1. Place all of your incoming bills, letters to which you need to respond, etc, in your inbox AFTER opening them and making sure they don't need to be acted upon immediately.

  2. Go through your inbox at least weekly to make sure nothing becomes overdue. When you pay your bills and respond to other documents, move them into your outbox.

  3. When you have the time, transfer the documents in your outbox into your filing cabinet. Your filing cabinet should include all of the things described above in your "Active File."

What to Save

There are a lot of documents you should save, regardless of the system you use.

For example, keep:

  • Tax records for at least the last three years.
  • Cancelled checks, or easy access to them such as via the internet, for at least the last three years.
  • Financial records relating to the cost of real and personal property.
  • Financial records relating to the cost, dividends, stock splits and related information with respect to all financial investments.
  • Health insurance information in case you need to prove "creditable" coverage for the last 18 months. (To learn more, see: HIPAA.)

Items to Discard

You don't need to save everything. It's usually safe to throw out:

  • Salary statements (once they have been compared to your year-end W-2).
  • Cancelled Checks for Cash or nondeductible Expenses.
  • Expired Warranties.
  • Phone and Utility bills more than a year old.
  • Credit Card bills more than three years old.
  • Expired Coupons.
  • Anything else that you are certain you will never need.