According to the United States Department of Justice, millions of Americans are the victims of financial fraud or identity theft every year. This kind of criminal activity has grown increasingly common during the COVID-19 pandemic because people grew more accustomed to doing their banking and medical appointments online or over the phone.
This epidemic of criminal behavior stresses the importance of proper document organization. Keep reading to learn more about the dangers of disorganized financial documents and how you can protect yourself from fraudulent schemes.
Choose a Secure Storage Method for Physical Documents
The bulk of your financial documents and paperwork should be sorted into a filing cabinet. You should create tabs to help organize your paperwork by year and topic. Some of these tabs may include:
- Loan paperwork
- Utility bills
- Medical expenses
- Mortgage paperwork
Your filing cabinet can be used to organize and file most of your physical paperwork, however, some documents require greater care.
Birth certificates, wills, and social security cards are some of the most valuable items in any household. By investing in a fireproof safe you can rest assured that your identity is protected.
When you create a safe storage space you also want to develop an organized filing system. This will let you quickly assess any files that are called into question.
Create a Digital Safe for Virtual Records
When filing your taxes, having an organized system will also help spread up the process. Experts at the Silver Tax Group can help you sift through your financial information to submit your annual taxes while keeping your private information secure.
You need to be cautious whenever you plug in personal information online. Hackers are digital criminals who use computers to gain unauthorized access to data. Because they prey on defenseless files, an unencrypted file of financial documents is their gold mine.
If you are storing private financial information, you will want to utilize encryption software as an additional layer of protection. Alternatively, you could store your digital files on an external hard drive and keep that in a secure location.
Dispose of Unnecessary Documents
When it comes to cleaning out documents, you want to handle all identifiable paperwork with the utmost care. Shredding is the best way to scramble your identifiable information when disposing of old documents. By simply throwing out your files, a passerby can easily steal your private information for fraud or identity theft.
If you hold tight to every record and piece of paperwork, you may feel overwhelmed or inundated with information. Getting rid of papers or digital files that are no longer relevant can help you stay organized.
Every time financial or legal document has a suggestive lifespan. For example, all tax returns and supporting documents should be held onto for seven years. This number comes from the different IRS timeline-based restrictions.
Use a Full-Proof Document Organization System
Criminal hackers and schemers are eager to gain access to your financial information- you can’t let them! By implementing a full-proof document organization system you can keep the hackers and identify thieves at bay.
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