Financial spring cleaning

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As March arrives and the days grow longer, Canadians seem to wake up from the cold, dark days of winter with a renewed energy that finds expression in a burst of spring cleaning. And while you’re getting your house in order, this is also a great time for financial spring cleaning – which means getting your financial house in order.

You don’t need cleaning agents, mops and brooms for your financial spring cleaning – all you need is a lockable drawer or filing cabinet and a supply of file folders in which to organize and store all your financial information. Your financial filing system should include:

• Bank statements
• Investment account statements
• Insurance policies and statements
• Tax returns from prior years and supporting information
• Mortgage and loan agreements and statements
• Investment purchases and sales confirmations

Documents such as wills and powers of attorney are best kept in a fireproof safe.

As you receive information through the mail or otherwise, file it in the cabinet. When documents become older than three years or so, place them in inactive storage (perhaps in a banker’s box, stored in a closet or your basement) to make room for new information. The Canada Revenue Agency suggests that income tax information should be kept for at least six years, however, some of your tax and financial documents should be kept for longer – for example, the evidence to support the cost of an investment property should be retained because it will be needed when reporting the capital gain or loss on the sale of the property.

Your financial spring cleaning should also include organizing your tax info – T3, T4, T5 slips, RRSP receipts, public transit passes, charitable and political receipts, child care and child fitness receipts, and so on. If you intend to deduct employment expenses, be sure to keep and organize receipts associated with your automobile including car loan and interest payments, gas and maintenance expenses (don’t forget car wash receipts) and insurance costs.

And while you’re doing your financial spring cleaning, why not get in touch with your professional advisor who can help keep your financial life on track – not just this spring, but for a lifetime.

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.