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How to Organize Your Finances with a Financial Inventory

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What happens if you or your spouse were to die or be seriously injured? Would you know how to handle the finances or know where to find all your important documents? Would you have a clear picture of all your financial accounts? Would either spouse be able to carry on managing the finances without input from the other?

For most people, the answer is a simple, “I don’t know.”

Why Create a Financial Inventory?

Doing a periodic financial inventory is a great way to get a big picture view of your financial situation, as well as a detailed view of all your accounts. A financial inventory is essential in the event of the death of a loved one, catastrophic natural disaster, fire, flood, theft, etc. You want to be able to resume your financial life with as little stress as possible.

My wife and I have been refining our finances over the three years we have been married. While they aren’t perfect, we have done a lot to simplify and organize our finances so we know where to find basic account information and either one of us should be able to handle the finances individually.

How to Create a Financial Inventory

Creating a financial inventory isn’t a difficult task, but it can be very time consuming. I recommend setting aside a large block of time where you can gather information, documents, and other pertinent information. In the process you may also find areas where you can streamline and simplify your finances. Take notes and make the changes later, otherwise you will split your efforts and double the time it takes to accomplish both tasks.

In your financial inventory you will want to create a list of all your financial accounts, including assets and debts, real estate holdings, titles, deeds, valuable property such as artwork or jewelry, insurance policies, retirement accounts, legal documents such as will and trusts, and contact information for important people involved in your finances, including your financial planner, accountant, or lawyer. Many of these items should also be included in your home inventory. Below are some of the steps you can take to create your personalized financial inventory.

List All Your Financial Accounts (Assets)

Your account list should include the contact information, address, account number, website address, user name, password, and other information necessary to access your account. This document will contain sensitive information, so you will need to protect it by keeping it in a safe deposit box, in a safe, or encrypted on your computer or external hard drive. Also consider keeping an encrypted file online. You can also keep the account number and password list separate – just make sure each is in a safe location and they are not stored together. You account list should include:

List Liabilities and Credit Accounts

This list should include lender contact information, account numbers, and a rough estimate of amount owed for each loan in your name. You want a rough estimate of how much you owe to make it easier for any survivors to get an accurate sense of your affairs.

  • Credit cards: list card issuer, number, and contact information.
  • Mortgage: lender information, escrow company contact info, purchase price, recent valuation estimate.
  • Personal loans: Auto loan, student loans, other loans.

Insurance and Other Financial Accounts

You will need to keep a copy if your insurance policies. If they are too bulky to print, then consider saving a pdf file to your hard drive or a portable thumb drive.

  • Health insurance and/or health savings accounts
  • Homeowner’s  or renter’s insurance
  • car insurance
  • life insurance
  • disability insurance
  • long-term care insurance

Wills, Estate Plans, and Other Legal Personal Documents

  • Wills: Living will, last will and testament
  • Durable power of attorney (financial)
  • Durable power of attorney (medical)
  • Beneficiary designations for bank accounts, retirement accounts, life insurance, etc.
  • Legal business documents, such as letters of incorporation
  • landlord-tenant contract
  • other legal forms or estate planning documents

Other Important Personal Documents

Your situation may include items not listed above, so be sure to include other important documents that you will need. Some examples are listed below:

  • Tax records, receipts, and related documents
  • Military record, such as DD form 214.
  • Medical records

Contact List

  • Next of kin and close friends
  • lawyer
  • accountant
  • financial advisor
  • insurance agent
  • physician
  • employer

A Financial Inventory Helps you Pick Up the Pieces

Doing a financial inventory will help give you or your survivors a complete picture of your financial situation, and make it easier to continue in the event the unthinkable happens. I recommend creating a financial inventory annually, or every time you have a major life event, such as a birth/death in the family, moving, new job, purchase a new home, start/sell a business, etc. Your financial inventory is also useful for creating a will or a financial continuation plan.


Published or updated January 12, 2012.
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{ 12 comments… read them below or add one }

1 Financial Samurai

Good reminder Ryan. We’ve done an inventory of our house belongings for insurance reasons, but doing something bigger like this is a great idea. We’ll do it this weekend.

BTW, sent you a shout out on my latest post. Thanks!

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2 David @ MBA briefs

Excellent post, and another good kick in the butt to get me to do something I’ve been neglecting/putting off. Something I did when I had to manage a federally funded program that was subject to property and financial audits was to take pictures of high value items and linked them to a spreadsheet with info about the items, model number/purchase price/purchase date/etc. Maybe a little anal to do in this instance but not a bad idea for insurance purposes. Anyway, it made the auditors happy :-)

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3 Ryan

David, I don’t think that’s overboard at all for an insurance inventory – especially if you have one of a kind items, heirlooms, antiques, or other items that are difficult or expensive to replace. I haven’t done an insurance inventory in a long time. It’s probably a great time to do it!

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4 LeanLifeCoach

We’ve been doing this for the past 10 years. It’s amazing how complicated your life can really get. We just updated it over the holidays but after looking at your list I see you have some other great suggestions like contact info for family and friends.

You also trigger the thought for those active on the web to capture all your connections there, affiliate relationships, account numbers, etc…

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5 Ryan

You should definitely do this if you have a business as well. Most small businesses are run in the minds of the owners and would suffer greatly should something happen to him/her. I need to create a continuation plan to show my wife what to do with my business should something happen to me.

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6 Don@MoneyReasons

I so need to do this! I’ve been slacking. Thanks for jogging my memory!!!

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7 David

Hey Ryan,

To start let me say that I really enjoy reading your blog. I am learning a lot, thank you.

I have a blog article request. I want to put a personal income statement and balance sheet together. I don’t really know how to do it properly, I’m also not sure if it is necessary – maybe it’s going a bit overboard. I would find an article similar to this one super helpful.

Thanks very much, all the best.

David.

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8 Ryan

David, Check out Consumerism Commentary, which might feature what you are looking for. The blogger there, Flexo, puts out a monthly net worth statement. Example: Personal Balance Sheet, November 2009.

He uses Quicken to create his reports.

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9 Kathy

Hello Ryan,
I am in the process of doing just what you have laid out in your article. However, I am having trouble determining the best format. Any suggestions as to the best way to document all of this? Is there anyone who has created a program or spreadsheet that I can just “plug-in” my own info? I just don’t know where to begin!

Thanks ~ Kathy

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10 Ryan

Kathy, I just used an Excel spreadsheet (you can also use OpenOffice.org or Google Docs for free alternatives). I create a heading for each type of account, account name, contact information and other pertinent data. Then I made a spreadsheet for each of the major topics: one for financial accounts (banks, investments, etc.), one for debts, contact info, home inventory, etc. It took a few hours, but I have a solid reference sheet for all my important info. There may be some pre-made solutions available for download, but I’m not aware of any.

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11 Alicia

Hi Ryan,
Thank you so much for the info. I’m married to an accountant and he takes care of all of the financial “stuff” around here. I’ve been wondering about something like this to have as a just-in-case. I sat down today and worked up the spreadsheet (with all 6 worksheets that you suggested) then informed my hubby that he needs to plug in all the info.
I am also adding a worksheet for all of the email and newsletter accounts that we have signed up for with logins, etc.
Next on the to-do list is a household inventory. Any suggestions for a template?
Oh, I did find a free “Personal Finance Organizer” on TodaysSeniors.com, of all places. I still went the Excell route though.
Thanks again,
Alicia

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12 Ryan

Alicia, there are a lot of free templates and software programs available. I found this one on CNET: WYO Home Inventory. Here are more free templates: Home Inventory Software. I would try a few and see which one best meets your needs. (note: These are the links for Windows OS, there are Mac compatible programs as well – for example, WYO Home INventory has a Mac version: What You Own Home Inventory for Mac).

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