This post is a continuation of our Financial Foundation steps. It’s crucial to keep all your financial information organized so that your loved ones can step in during an emergency.
In previous generations, financial assets were simpler to manage. People had fewer accounts, and most assets had paper trails, making it easy to gather information. However, in today’s digital age, online banking and statements have made managing finances more convenient, but also more complex. Many individuals now have multiple accounts across various platforms. Without proper record-keeping and family involvement, your loved ones may have no idea what assets you hold. This makes it more important than ever to keep your financial information organized.
A well-organized financial record will help your family piece together a complete financial picture if they need to take charge during unexpected events.
What Information to Capture
- All bank accounts
- All investment accounts
- All insurance details
- All real estate information
- All digital asset details (e.g., domains, email, social media accounts)
- Other asset details
- All loans or borrowing information
- Important IDs and documents (including storage info)
- Key contacts (e.g., friends, financial advisors, will solicitors)
Best Practices for Capturing Financial Information
Storage: Since this is sensitive financial information, it’s essential to protect it from identity theft or fraud. Avoid storing it in cloud storage without encryption. Instead, consider keeping it in a physical copy or a secure diary. Make sure your loved ones know where to find this information when needed.
Level of Detail: The goal is to help your family build a full picture of your assets and financial situation in case they need to take over. This document should not include sensitive details like login IDs or passwords. A person with power of attorney can access accounts by directly contacting the bank or institution, without needing your login information.
Identifiable Information: To reduce the risk of fraud, avoid including personal identifiers like Social Security numbers or ID number. Use general terms like “self,” “spouse,” “daughter,” or “son” when referencing accounts. You can also note the location of important documents instead of listing serial numbers of document.
Digital Legacy: Much of our life is now stored digitally, and it’s wise to set up a plan for your family to access these accounts. For a helpful guide on how to do this, check out this resource.
Primary Email Access: Sharing access to your primary email with someone you trust can be very helpful. Your email can serve as a tool to reset passwords and access important digital statements.
Simplify: Once you’ve gathered all your information, take the time to review and simplify your financial life. Consider the following:
- Can you close any unnecessary accounts?
- Can you consolidate any accounts to make management easier?
- Are the nominee details on your accounts still up to date?
- Is your insurance coverage still adequate for your current life stage?
Example Template to Store Key Financial Information
You can download this template to store your key financial details. Create a copy of the file, update it regularly, and set an annual reminder to review and revise the information. It’s a good idea to create a new version of the sheet each year to keep track of any changes over time.
Download Template from this link: KeyFinancialInformationChecklist