Principle 18. Safeguard your documents.



How many of us are systematic in document filing and protection? Everyone should identify and protect key documents in such a way that it’s easy to retrieve it when needed without any confusion. For that, first you need to classify your documents and keep it in separate files at one place. You need to have a space in your shelf to keep all these – at the same time make sure it not within easy reach of children.

Now, let’s have a check at what are those important documents.

  1. Financial documents like bank records, loan records, investments.
  2. Documents of assets you bought like warranty cards.
  3. Documents related to your health & education
  4. Personal documents.
  5. A summary of all these in written form- in a diary.

FINANCIAL DOCUMENTS.

  • BANK RECORDS: It’s important to take a print out of your quarterly bank statement and go through it. Banks are no fool proof systems – errors are possible at anytime from the bank’s side.
  • Keep an eye on the charges debited. Some bank accounts carry a lot of charges compared to others. It’s also important to check whether the automated debits and credits are being regularly done by your banker.

  • Always keep a file that contains at least 1 year bank records.
  • Know the type of account you are maintaining and the features of that account- some accounts come with zero balance facility while others require a minimum monthly or quarterly balance to be maintained.
  • Keep your cheque books safe. Never keep signed blank cheques in anticipation of an emergency.
  • Make two complicated passwords – one numeric and one alpha numeric, and use it for all. For example – ATM cards, bank lockers, phones, locks etc generally require numeric passwords. All others like personal laptop, internet banking, visa secure, email ids, income tax, share trading accounts and other official sites where your have registered generally  require alpha numeric passwords. A single but complicated password memorized is better than having different passwords.
  • LOANS: Most important advice – Always demand a copy of the filled loan application form submitted to the bank. This helps you a lot when it comes to follow up of your loan application. 99% of us don’t have this vital record. If you couldn’t do this because of circumstances – take a picture of the application form on your mobile phone.
  • Keep a list of documents submitted to the bank. When your loan gets sanctioned, your sanction letter will contain the list of documents submitted by you as per bank records. Make sure both are tallied. This check list becomes extremely useful not now- but Years later, when you pay off all the liabilities and ask the documents back.
  • Keep a certified photo copy of property documents that’s pledged with the bank. Generally the title deed, prior deed, land tax receipt, building tax receipt, location and possession certificate would be with the bank.
  • Loan sanction letter and EMI chart.
  • Ask for periodic loan repayment statement- this will help you to check whether the bank is charging your loan account with any extra charges.
  • If you have insured your loan- documents related to insurance,
  • In case you pre pay the loan – If you have given post dated cheques, keep a record of the same and demand the balance cheques. If you have given an auto debit instruction through ECS, make sure that the auto debit instruction is cancelled with your bank.
  • After finishing off your obligations with the bank, there are two more important documents to be obtained and filed- Loan closure letter and a full repayment track.  Years later, when you apply for your next loan this letter may become handy.
  • INVESTMENTS: Land and building is usually the most valuable assets people own. They can be sold and mortgaged to raise money and hence these are very valuable. It can also be target of fraudsters, especially where the owner is abroad or absent.
  • Keep the originals of all the properties you have in a separate file.
  • If you are an NRI who has inherited / bought property in India, make sure that  proper arrangements are  made to keep custody of the property. Make all the payments like municipal taxes and electricity bills through cheques so that a permanent record of the payment made is automatically created.
  • Do Not give unlimited powers to relatives or friends through power of attorneys.  Power of attorney should give only restricted powers . In any case, caretakers of the property should not be given powers to transfer the property.  For any property – have a compound wall and a nameplate engraved on it.
  • Keep a video record of the entire property.
  • Keep clear record of mutual funds, shares, insurance etc you hold. You may also have money invested in your spouse’s or children’s name.
  • Keep a clear record of gold and diamonds especially if it is kept in the bank locker.
  • If you have changed your phone number/residence promptly update with all the concerned parties like banker, insurer, credit card issuer, mutual fund house, government records, stock broker etc..
  • OTHER ASSETS: From phones to cars – everything comes with a warranty when you buy.
  • When you buy such assets, it comes in a big glossy pack with lots of stuff- protective wrappers, instructional manual, contact numbers, broachers etc- but the most important documents in the pack are the warranty card with the dealer’s stamp on it and the bill.
  • Mobile phones, calculators, fans & air conditioners, televisions, music systems, computers, furniture, oven, refrigerator, washing machines & dish washers, grinders, watches – even bags and shoes come with warranty.
  • These bills and warranty cards are easy to get misplaced if you don’t put it in a separate file. Assuming that you have the above mentioned assets with you – you must have at least 15-20 warranty cards and bills with you now if you have filed it in one place.
  • The importance of these documents arises when the equipment you bought doesn’t deliver the performance that was expected within the warranty period.

OTHER DOCUMENTS

Although we were talking about protecting financial documents, there are other categories of documents which are equally important -

  • This would include identity cards, licenses, PAN card, passport, voter’s ID, employment card etc..
  • The above records of the entire family can be preserved in one file.
  • This collection can also include few passport size photographs.
  • Hospital registration cards of your family
  • Phone numbers of your doctor and the hospital where you do regular check up.
  • Other documents like your baby’s stem cell protection certificates, x-rays etc..Every document that’s got to do with your family’s health should be in one file.
  • Your education certificates – right from 12th to your professional degree to additional certifications and diplomas – including a copy of the syllabus covered needs to be preserved.

SUMMARY IN WRITTEN FORM.

Although everything is in place, you still need to write down the details in a dairy and keep it for ready reference.

  • For example -
  1. All your bank accounts numbers – bank and branch address, details about the nominee,
  2. Credit card numbers.
  3. Details about all the insurance policies you hold- this should also include certain type of polices that comes free with certain financial products.
  4. Keeping track of all your investment commitments in a diary or planner helps you to be systematic in yearly payments. Helps you to plan ahead for it and be in control.
  5. Summary of the property, jewellery or other assets you hold.
  6. A clear written summary of your loans and other liabilities, with regular updation.

You may like these posts:

  1. Principle 11. Utilize credit cards wisely.
  2. Principle 16. Avoid financial litigations
  3. What are Demat accounts?

4 Responses to “Principle 18. Safeguard your documents.”

prashanth

February 4, 2013 at 9:12 pm

mind blowing

Mayur

July 29, 2013 at 2:34 am

great info….
thanks very much….
keeping a record of all the documents helps a lot as i used to spead lot of time searching for documents kept in cupboard without any proper arrangements…thanks again dude…you rock!

Manish Gupta

October 11, 2013 at 4:36 pm

Brilliant Article. Now I will arrange my all documents in this pattern which is very helpful and time saving to find the documents. One more suggestion i want to add that you can keep your important Cards in Card Holder which is safe and easy.

parag ghatode

March 20, 2014 at 11:17 am

Awesome note Mr. Victor.
I am speechless for yur articles.

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