7. Keeping good records

The Importance of Good Record Keeping

Good record keeping is an important discipline as you map out your financial goals. Imagine if you were notified of an IRS audit: How difficult would it be to get all the necessary past information together? If you have all the data in a single, well-organized place, however, you will be ready for any situation.

How do you get organized?

	One good record-keeping tip is to prepare your financial statements at least .
	Ideally, keeping will help you summarize all your transactions.
	A ledger has sections where data is recorded for what you own or your ; what you owe or your ; your cash inflows or your ; and your cash outflows or your .

Key Steps in Record Keeping

Keeping good financial records will save you time and make you money. If your records are organized, youll have an easier time:

	Compiling a budget
	Pulling together an updated financial statement
	Accessing your records in an emergency
	Preparing your taxes
	Preparing for an IRS audit
	Defending a credit report

Which of the following are important steps in financial record keeping? Check all that apply.

Maintaining records for tax and insurance purposes

Keeping your documents in a place where everyone has easy access to them

Safely disposing of unneeded documents

Ensuring that your family and/or executor can locate your financial documents