- Date : 31/05/2022
- Read: 4 mins
A receipt or acknowledgement is generally issued for every transaction or payment that is made. You should also evaluate which documents you will need for their records over the long-term if you are a woman who likes to manage her own finances and is interested in investment assets. We'll go over the financial records you need to keep on yourself.
For every transaction or payment that is carried out, there is generally an acknowledgement or receipt that is recorded. A decade ago, most of these used to be in physical form that you had to maintain in file folders, while today, most are online. It can get difficult to discern which paper documents lying in your cupboards and drawers need to be retained and which can be fed to the shredder because they're only occupying space.
If you are a woman who likes taking control of your own finances and have an interest in investments and financial assets, you also need to take stock of which documents will be needed for their records in the long-term and which ones you can discard to reduce the clutter.
Let us look at the financial records you should keep with yourself. Also, we will mention the duration for which you should keep the records.
Receipts - Some receipts need to be stored, especially the ones which you have used for filing tax returns. Store them for at least three years. The Income Tax department may ask you for clarification, in which case you will be able to furnish the records and provide justification.
Home improvement records - If you have made any significant changes to your home, you should keep the bills for three to seven years. If and when you sell the house, these bills will help you with two things - quoting the higher price for the home and lowering your taxable gains.
Medical Bills - You should keep your medical expenses bills at least for a year. When you make medical insurance claims, you will need the bills as the insurance provider may ask for details.
Credit card statements - Usually, you should keep your credit card bills until all charges are confirmed and you have payment confirmation. For example, if you have opted for the EMI option for purchase with 12 cycles. You will need to keep your bills at least for a year.
Investment documents - You should keep your investment documents for at least three years. For example, if you have sold some mutual fund units, you may want to keep the record as you can offset the gains with losses later. All your long-term investment documents should be kept as long as the investment is active and three years beyond. If you have brought a LIC policy with a tenure of 15 years, you should keep the documents until the policy matures (+3 years).
Bank Statements - You should keep the bank statements for at least three years. If you are receiving both monthly and yearly statements, you can shred the monthly ones once you receive the yearly statement. Every bank provides online statements now, the best thing to do is switch to online statements. If you have a soft copy of your statements, then you can go ahead and shred the physical documents.
Tax returns - You should keep tax returns documents for six years, preferably forever as you may need them for personal reference anytime in the future. The Income Tax Department can come back to you for clarification for up to six years, and hence you should keep the records handy.
Loan documents - Even after you have paid your loans, you should keep the documents for at least 5 years, preferably forever. In the worst-case scenario, the bank may show some processing error, and you may be tagged for pending payment. In such a case, the loan document will help you present your case. The loan document could be your student, car, or even personal loan.
Payslips - For women who work, maintaining payslips is a must. Keep them for at least a year or longer if you expect to show proof of employment in the future. Many potential employers ask for payslips to verify your previous salary.
Utility Bills - You should retain utility bills like those for electricity, telephone and cooking gas for upto a year or two. If you frequently relocate, be sure to keep one utility bill record for the beginning of your stay and one for the end. Sometimes these are needed as proof of residence so be sure to retain at least one each year to prove period of residence if needed.
The way forward
For all adults, but especially for women, taking charge of your own finances can be empowering. If you are just starting, the experience may be overwhelming but sound advice from trusted sources will hold you in good stead. You can always seek advice online. Converting all your financial records to their online versions frees up your cupboard space and makes it easier to search for them when needed.