A sound financial records system must have at least the flowing features.
a) The system must be safe enough to not be at risk to natural disasters.
b) The system must be comprehensive enough to provide the information you need.
c) The system must be recoverable so that it easily allows you to review past history.
d) The system must be able to allow for the future projections. Safety is an important aspect of keeping records.
However, in the case of a fire or some other natural disaster it becomes apparent that this too is something that needs to be considered. Talking to anyone who has been through such an event will quickly convince you that this is something you must account for while at the same time hoping it is never needed. Needless to say there are more things than just financial records that you may want to include in whatever it is you decide to use as a safety device. Some possible options to satisfy this need are intangible data storage or a fireproof personal safe. You can easily find a fireproof safe at a business supply store. Intangible data storage is referring to a third party whom you upload and backup files to on a regular basis. These too are easy to locate with an Internet search. Records are like the footprints in the journey our money makes into our pocket and back out of our pocket. If we do not know where it enters and where it leaves we will never be able to manage it with any success.
The record keeping system also needs to account take care data protection and safety This is something that a computer based software like excels can do. It is very easy to make copies of the necessary files and burn them to CD. If you use a paper based system you are forced to make hard copies and store them somewhere as well. It is the prospect of recoverability that makes software based solutions the most effective and comprehensive. A software-based system will have within it a backup system that ensures your records are safe and protected at all times and in any emergency. A simple excel sheet can take care all of your financial and personal data keeping requirements. Always ensure that, your personal and finance related data should be kept password protected and keep a backup in a CD or other data storage device.
Records are useless if you do not review them. A good record keeping system should be able to project itself into the future or the past and also allow you to change certain figures and see the result of that change in your bottom line net worth. Again, paper based systems fall short regarding this since any projection into the future requires a monumental amount of manual computation. On the other hand, software solutions can quickly and easily give a picture of your financial situation at any point in the future or the past.
The following list outlines some of your physical record storage options:
a) A safe deposit box is the safest, most secure storage option. You can rent a small safe deposit box at most banks for approximately Rs. 500 – 1, 00 per year. Jewelry and other valuables and other important and valuable documents can also be stored in your box. If the safe deposit account is opened jointly with your spouse, the remaining spouse can access the box in your absence. Always ensure to keep copies of all of your important papers in your home files or with your executor so your family can carry out your last wishes in your absence or in case there is a theft or fire in your safe deposit box.
b) A fireproof safe gives you the convenience of having your important papers at home, while providing protection against fires and burglary. When purchasing a safe, be sure it will protect paper against the heat of a fire for 4-5 hours.
c) A file cabinet is one of the most important components of your financial record keeping system. You don't need anything fancy, just something large enough to store all of your records. It is imperative that the file cabinet be kept in a convenient location to make it easy to maintain your system. Be sure to clearly label all of your files so that documents are easy to find.
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