Womoney: Organizing Financial Records

Organizing and Understanding Financial Records

One of the keys to the financial planning process used by Sharon Rich is assembling client finacial records. She asks clients to bring all essential data that planners use to prepare a comprehensive plan: income and expense summaries, tax returns, company benefit booklets, insurance policies, loan agreements, and statements from investment accounts. Rich then sits in front of the computer and enters all the necessary data, with clients finding figures from documents they brought. "I still use a simple Lotus spreadsheet, so when clients leave, they have all the numbers," including cash flow and net worth statements, and, when appropriate, retirement, college funding, and home buying projections.

"Then I do a lot of basic education," she says. "My goal is to send the client home with a list assignments." For example, one client came in with an annuity in a retirement plan. Rich sent him home to find out the penalty for getting out of the contract, since an annuity is already tax exempt without holding it in a retirement account. Another woman was using a stockbroker for her investment portfolio, and her return was pretty dismal. So, she helped the woman develop a list of ten questions to ask her stockbroker. "If I find out for her, it really doesn't teach her anything." "I'm sending clients to do their homework. They're not paying me to do it," she says. "My goal is to have them learn something, and they are empowered by the experience to take control of their finances."

Sharon teaches a class at the Cambridge Center for Adult Education on organizing financial records called "Order out of Chaos" and a budgeting course called "Financial Fitness."

Home

Tools

Services

Background

hosted by: