May 10, 2022

How to Organize Personal Finance Documents?

Arijit Sen And Seema Kakade
a woman officer pick a binder of document

As practicing Personal Finance Professionals, we do recognize the relevance of keeping family’s financial documents organized at all times. It’s part of our job to ensure that our clients are also maintaining their financial documents in order. As we get to meet a lot of prospects, rarely we find someone who’s keeping his/her financial information or documents in an orderly manner. Majority of them have never realized the need. But only after the pandemic, people started thinking about it actively. Moreover, they do not know how to organize personal finance documents. Thus, our role as their guide becomes extremely important.

Here are 2 such case studies by Arijit Sen & Seema Ahuja (Both are NFP ProMembers, QPFP® Certificants & present NFP ThinkTank Taskforce Members). They have shared their thoughts on how guiding clients in organizing financial documents empowered their clients and how it impacted them in a positive way.

Power Of Organizing Financial Documents by Arijit Sen

“For every minute spent organizing, an hour is earned.”– Anonymous

One lady approached me to create a Financial Plan for herself in the beginning of March, 2022. She’s single and living with her parents. During data gathering session, I figured out a very common issue. She had no clue of the insurance policies and investments her parents have. She has been contributing an amount of money on a monthly basis to her parents because their passive income isn’t enough to make ends meet.

She’s their only child. Thus, it was clear that she was the one to take complete responsibility of her parents, now and in the future as well. During our second meeting, besides general discussions, I highlighted the relevance of maintaining personal finance documents in a well-organized way. Since her parents are dependent solely on her, I urged her to proceed with organizing all financial information and documents for self and parents. I guided her with regards to how to organize personal finance documents. It took her 8 to 10 days to track each and every financial document of her parents. She felt confident. She decided to streamline their finances along with hers from April.

It was nearing the end of March. A distressing incident shook my client’s world. She received a call from her mother in the afternoon. She was at work. Her father had a heart attack. He had to be hospitalized immediately. Her mother went crazy as she could not locate the health insurance policy copy at home. Her father was not in a state to speak and share where the policy copy and medical card were kept. She knew that they were not in a position to afford the treatment in cash (without availing cashless facility of policy). Imagine her mother’s situation. On one hand, her husband’s ill health was worrisome. On the other hand, the fear of meeting hospital bills in cash could turn out to be a daunting task. 

However, on the brighter side, my client was able to retrieve the soft copy of their health insurance policy and the medical card from her records to process the cashless claim while on her way back to the hospital. She informed the same to her distressed mother, who sighed a relief.

After completing the formalities at the hospital, she called me up from the reception desk itself. She briefed the situation and thanked me in the end. She acknowledged that she could provide the documents instantly because of the exercise she did to organize her personal finance documents. As a professional, it made me feel good. Thankfully, her father is doing well. Now, she has started taking necessary steps to streamline their finances along with hers.

This incident reiterated the power of keeping financial documents and information organized. The above stated anonymous quote started making even more sense to me as a Financial Planner.

Obviously, as the first step is to organize personal finance documents; the ultimate need is to make your clients share the detail with all potential family members. When it’s accessible to all family members, additional stress can be avoided in times of emergency or urgency.

Acquiring A New Client by Seema Ahuja

I came across an exercise during my QPFP course by Network FP which was a complete game changer when it comes to how to organize personal financial documents. I could realize that an important piece of the puzzle has fallen in place for me. Previously, I tried doing it in multiple ways – manually, in excel, etc… but I was not satisfied by the outcome. 

Post that, I started encouraging my clients to also go through the exercise and made them understand how to organize personal finance documents. Apart from existing clients, I also started conducting free sessions for friends, family and acquaintances. I share the session links with my friends and ask them to share further so more people could benefit out of it. 

A lady attended one such session. She had received the link through another friend of mine. After a couple of months, she got my number and called me. She wanted me to meet her husband. As is the case most of the times, the husband is handling the business and the finances also. But, she realized that she needs to be involved in what is happening with their finances. This concern was triggered when she heard the story of Priya (Letter by Priya) – content of the session. 

The first meeting itself was a very detailed one. I took them through the complete financial planning process and the importance of having a Financial Plan. We were also able to identify and list down all the goals. They provided details of all their assets post the first meeting itself (Power of educating clients first). There were some goals which they felt were not very important, but I insisted on listing down all of them. They were definitely worried about achieving their main goals.

In the second meeting, I was able to present a detailed Financial Plan and was very happy to inform them that not only will they be able to achieve their “primary goals” but also their “dreams”. They were relieved by the fact that they need not stress too much about the future. I was glad that I was able to give them that comfort to lead a stress-free life. Not only did they become my clients, but also very good friends during the journey. 

So, the exercise to organize personal finance documents is not just a documentation tool to start with. It can help you to acquire a client and build a strong relationship thereafter.

Organizing documents always gives us relief. We become more conscious of our finances. 

In the 1st case it was a client who got documents at the right time. In the 2nd case there was a client who could streamline their family finances.

So, it’s evident that it’s always fruitful to do this activity with your clients. The end result is always good.

To have a more detailed understanding on how to organize personal finance documents, watch our latest video by Sadique Neelgund (Director, Network FP) on YouTube here.

2 Thoughts to “How to Organize Personal Finance Documents?”

  1. chandra says:

    GOOD & very informative article..Documentation need to be properly maintained,

  2. RSN MURTHY says:

    good and bringing awareness in the client.

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