Organize Your Financial Life Part 2 — I.C.E.

Whenever we travel by car, Wheels adds a pair of rubber boots to the cargo.  Weather insurance, he says.  If he has them along, it won’t rain.  You have to know their twisted sense of humor to get the laugh out of that statement that he and Bytes do – but it has worked!  Wheels has never had to wear those boots.   Our topic today is like the “boots in the trunk”.  No guarantee of sunny weather but you’ll be prepared – and everyone hopes those preparations are never needed.

In the first post in this series, I told you we would use the information gathered for tax purposes for several other things as well.  First of all,  that nice neat pile of tax papers from that post is going I.C.E.

In. Case. of Emergency.   Most of us, if traveling for a year, would likely leave instructions with people at home in case something drastic happened to you, your family or property at home while you are gone.  We don’t have to be gone for a year, for drastic things to happen – so neither should we put off thinking about theft, accident, illness, disasters.  By taking a half hour of your time, you will make it easier for those who will have to handle your affairs to find crucial information in a time of stress.  It can also be a help to you or your spouse, and if children are a factor to consider,  equipping the adults in charge makes their lives less disrupted.  And if it is never used . . . . it is still a good way to spend half an hour or so because we will use that information in other ways, too!  Each post builds on the work done from the previous posts.

What we will do is prepare a collection of documents for someone else. A trusted friend, an attorney, relatives are logical choices.  It is not necessary to give this person all of your specific information, but they do need to know where to find that information in case of emergency. So easy to do when you have already gathered original documents for taxes.  We will pull information from those documents, add a bit more and you’re prepared.  Next we will use the information you’ve gathered for this step to set financial goals in Part 3 and to develop a budget or spending plan in part 4.  Part 5 offers tips for building a go kit from this information, if you live in an area where evacutions happen because of wildfire, floods or hurricanes. Use only the Information Managers that fit your situation.

• Look at the W2s for the full name and social security number of each employed person. You can use Personal Information Manager  form to record this, as well as the name and contact for each employer. Be sure to add the phone number of immediate supervisors. Add birthdates and other information as directed for each member of the family.  If you travel, add passport numbers, driver’s license numbers and auto tag numbers.
• Insurance information entered on the Insurance Information Manager Form.  If health and/ or life insurance is through employer, note also human resources phone number. Add Long Term Care Insurance and disability insurance if you have them.   If you did not itemize, you may not have used this information for taxes, but it is still crucial for your emergency person to know. Include auto and renter or home owner’s  insurance information.
• Health Information –.  If you had enough expenses to claim on taxes, much of this information will be at your finger tips. If you didn’t, the good news is that you likely only have one or two doctors to add to the Health Information Manager.  If necessary, complete a page for each member of the family.   (Pets, too.)
• Financial records –The 1099’s received from brokerages, IRA accounts, banks  for tax purposes will have information on the institution and account numbers for your investments and income.  Add your checking account, 401K or other deferred compensation account.  Here is where you will find Financial Information Manager.
• Legal Records – Powers of attorney give  someone the authority to act in your behalf.    They are often drawn up at the same time as wills, living wills and medical directives. All are generally kept in the attorney’s office.  You can also write letters of instruction, containing additional information, to be given when power of attorney is used. Some people choose to make their financial information available in this way, depending on their situation.  Note these documents on the Legal Information Manager form.

Now you know what types of documents are needed.  Your particular situation will determine if which specific information you need.  Newlyweds with no children, renters, no medical issues and no investments can copy their W-2 information add work contact numbers, write down their doctor’s name and phone number, copy one each auto, renters insurance,  bank statements, health and life insurance information and be pretty much done.  Others of us will have more complex situations.   Use only what Information Manager forms are needed to fit your situation.

You can mail a set of the completed forms to your designated person.  I used to leave a sealed envelope with my mother, who lived several hundred miles away, and exchange it whenever something in our situation changed.  Now son Bytes has the sealed envelope.  You can scan copies of the completed Information Manager forms and share them electronically,  using USB drive or cd, save them to a shared file or online storage to which you both have the password.  Choose whatever of a dozen different methods meets your comfort level.  Although I do almost everything electronically,  I personally think a hard copy for your designated person is essential, as a back up just in case there is an electrical outage or other problem when the information is needed.  (Just because it will likely be needed promptly!) Either ask them to print out a complete set of the information and store it in a safe place or provide them a copy.

Whatever you do, hang on to a set of copies for yourself.  We’ll need that information later!  Stay tuned for the next installment!  Each post builds on the work done from the previous posts.

 Part 1 – Preparing for Tax Time

This Post is part 2 – In Case of Emergency.

Edited to add these links:   Setting Financial Goals  Part 3,  Build a Budget   Part 4,  Go Packet for Emergencies  Part 5

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Have a joyful day!