This week I have three carnivals to share. One is a new entry in my carnival line-up.

First, the Carnival of Personal Finance #161 hosted by Internet Banking For the Real World. In addition to my post about why you need a will, you might also like The Family Wallet’s post about insurance needs after you have a baby.

Next, the Money Hacks Carnival #20 hosted by This Writer’s Wallet. If you liked my post about creating your list of accounts, check out what’s in Cash Money Life’s wallet. I don’t recommend using this method to backup, but it’s a good way to figure out what you need to include on your list.

Finally, a new carnival to this round-up, the Finance Fiesta. Finance Fiesta #7 is hosted by Living Almost Large. If you liked my initial post about the documents you need for an emergency, you should also how the Personal Financier turns budgeting into a family activity. You can also make assembling your documents a family activity.

We’re in the home stretch for the emergency preparedness documents series. The second to last items you need to prepare your financial backups and tax forms. These are relatively easy to prepare and store.

Financial Records Backup
You should backup your important financial documents at least once a month. Statements are easy to order if you lose them, but it would take days to rebuild your money management system if you lost all the data it contained.

If you use Quicken, it includes a simple back-up button. Back it up to a folder on your computer and then include it in your regular backup settings. If you manually track expenses in Excel or by some other method, then just include it in the regular backups, too. If you keep track of your expenses on paper, reconsider that. You could lose everything in a fire. It’s much better to store them on a computer.

If you use an online program like Mint or Yodlee, you’re already backed up and don’t need to worry.

If you have important financial documents like proof that you mortgage is paid off, keep those in the safe deposit box in case your bank makes an error and starts billing you again. (It happens.)

Saving Tax Forms
The good news is that the IRS can provide you with copies of your filed forms if you lose them. The bad news is that they don’t have your receipts. If you file a standard form with just a W-2, then you can keep the forms in a regular filing cabinet with your W-2s and other statements.

If you have a business, then it’s vital that you keep your receipts and other paper documentation in your emergency box, a safe, or your safe deposit box. If you had a fire and were later audited, you’d have a difficult time proving your expenses. I make copies of the receipts printed on thermal paper because they fade with time and keep them in the emergency box. You don’t want to walk into an audit with a shiny piece of blank paper as proof of an expense.

Keep your tax forms, receipts, stock trading receipts, property sale documents, and other supporting documents for at least three years.

And that’s it. These are all the documents you need to assemble and store to be prepared for an emergency. Monday I’ll finish the series with instructions on using these documents to prepare your “red file.”

A computer backup isn’t a document, per se, but it’s still something you should include in your emergency preparations. Once you get in the habit of backing up, it’s a quick and easy way to make sure that your data is safe in case your house burns down or your computer blows up.

Set a Computer Backup Schedule
No matter which method you use for your computer backup, you should set a regular schedule to do it. I backup my computer on Saturdays. It takes two minutes to update the files that have changed. You may want to backup more or less frequently, depending on how often you change data. For example, if you mainly use it for monitoring your finances and sending emails, once a month might be enough. If you’re a heavy business user, you might want to backup every night.

Choose a schedule that works for you and you’ll remember. If you won’t remember, choose an automatic computer backup method to make sure you’re protected.

Computer Backup Methods and Storage
There are a few different backup methods. Choose the one that is best for your needs and then make a commitment to use it. The most common methods are:

Manual DVD Backup
Most people have CD or DVD burners in their computers. Before I got a thumb drive, I would back up onto a CD and then mail it to my parents, who live 400 miles away. I used to keep it in my emergency box, then a small plane crashed into a Los Angeles building. I realized that I was ready for an earthquake, but I would lose my data if there were a fire while I wasn’t home.

Thumb Drive Backup
Rather than a CD, you can also manually backup your computer onto a thumb drive. Mine came with backup software installed. All I have to do is click the backup button on my desktop and it adds any changed files to my thumb drive every week. I keep the drive in my emergency box, but you can also carry it with you.

External Hard Drive
If you have too many files to fit on either of those two options, then you could opt for an external hard drive. It may even come with automatic backup software. Just install it, set the backup time, and it goes. However, you’ll have to remember to grab it if your house is on fire and it’s not in your emergency box. It will be helpful in the more likely scenario that your computer’s hard drive fails.

Online Backup
If you’ve already decided to backup your photos at Carbonite, then you can also backup your files there. At only $49.95 a year, it costs just thirteen cents a day for automatic backups and the ability to access your data from anywhere. You don’t have to worry about grabbing a hard drive on your way out the door and you can store as much data as you want.

What to Backup
You don’t have to backup your entire computer. Software can be reinstalled. Instead, you should backup the following files:

  • Music not on your iPod (this may require a hard drive or online backup)
  • Videos (hard drive or online backup probably required)
  • Photos
  • Word processing documents
  • Email
  • Bookmarks
  • Financial data
  • Address Book (email and personal)
  • Calendar

You could also have two computer backup strategies – once a month for your major media and every day or week for your financial data and documents. Whatever you do, make sure you backup somehow. I’ve had two hard drives fail. We were able to recover my data, but I had two nights of panic about whether or not we could.

If you know of another computer backup method or tool, tell me in the comments. Tomorrow, the emergency preparedness series continues with your financial backups and your tax forms.

If you’ve watched much disaster coverage, you know that people often mention losing their family photos. Either they didn’t get a chance to go home to collect them or there wasn’t enough time to get out of the house with them. It doesn’t take a disaster to lose your photos, though. My husband’s childhood photos were destroyed by an attic flood. Other people have lost photos to house fires or room fires. Time can also take a toll on photos. Rather than risk the loss, take a few steps now to protect all your photos.

Digitize Your Photos
Most people now have digital cameras, which means our new images are already digitized. You probably have a box or several albums of older photos, though. Set aside some time to scan your old photos into your computer. You don’t have to do them all – choose those that mean the most to you. If no one can remember the people in the photo, it’s not one you need to preserve. You can pay a service to preserve your photos, but setting aside an hour or two each weekend to do it yourself will save you a bundle of cash. Money Magazine rated the various digitizing services in December.

If you do it yourself, the only concern is with some older photos that may have damage. I have a photo of my grandparents holding a newborn me. It had faded from the sun, so I took it to a local professional photo lab. They were able to restore the colors and give me a new print, as well as a CD of the restored photo. If you have photos like that, take them to a professional to ensure that they’re properly restored.

Digital Photo Storage
Once you have them digitized, it’s not enough to leave them on your computer. You have to back them up. There are a few options for doing this:

  • External hard drive
  • DVD
  • Online storage

External Hard Drive
If you have an external hard drive or a large thumb drive and are organized enough to back it up regularly, then this is the best option. You can buy two drives and keep one in your safe deposit box and one at home. Swap them out regularly. You could also keep the drive in a home safe or your emergency box.

A DVD is the next best option for photos. It has more storage space than a CD, so you can cram more photos onto it. It’s also slim enough to fit easily in a safe deposit box or emergency box. You could also mail it a relative in another area. If they’re photos of deceased family members, it might be a nice gift for several family members.

Online Storage
Many of the major photo printing services, like Snapfish and Shutterfly offer unlimited online photo storage. You can also load them on a site like Flickr, although that could expose them to the public if you don’t properly set your privacy settings.

If you do opt for an online site like Snapfish or Shutterfly, I would order a few photos from them every year to be a good customer. You should also sign in to the service every month or so to avoid having the account deleted for inactivity.

If you’re willing to pay for more secure storage, try XDrive. Five GB are free, but you can get 50GB for $9.95 a month. You could also use Carbonite, which costs $50 a year for unlimited storage.

Once your photos are safely digitized and stored, you won’t have to worry about them. Yes, you may lose the actual albums themselves, but those can always be reproduced if you have the digital files. Tomorrow, computer backups are the next in the documents you need in an emergency series.

Continuing with the series about the documents you need in an emergency, today I’m covering titles, deeds, high-value receipts, and loan documents. I’ll sum it up first in one line: keep them in the safe deposit box. If you want more info about obtaining copies of lost items or ensuring everything is secure, keep reading.

Car Title, Boat Title, and other Title Documents
Even if your car, boat, motorcycle, or other vehicle is technically owned by the bank, you’ll still receive a copy of the title reflecting you as the owner and the bank as the lien holder. Once the loan is paid off, you’ll receive a clear title. Regardless of what is stated on the title, you should keep a copy in your safe deposit box. If you don’t have one, keep it in the emergency box or a home safe. These documents rarely need to be accessed, so you don’t need to worry about instant access. Whatever you do, don’t keep it in the car.

If you lost the title and need a replacement, you can order a new one through the DMV for a small fee. When you receive it, make sure the VIN and other details match those of the vehicle, and then put it in a safe place.

Property Deed or Mortgage Deed
A deed is actually the document that conveys title, but it isn’t usually called a title. If you have a mortgage, the deed may be a deed in trust held by the bank until the loan is paid off. Whichever type of document you have, you should also keep it in the safe deposit box, home safe, or emergency box. You’ll only rarely need to access the deed.

If you lost your copy, you can order one from the county clerk, country recorder, county registrar, depending on the rules of your state/county. Deeds are public records, so you can also search for it yourself. There’s usually a small fee to order a certified copy.

Loan Documents
Loan documents rarely need to be accessed, so a safe deposit box is sufficient. You could also keep them in a safe or your emergency box. If you’re not terribly concerned about a disaster, then a home filing cabinet will even work.

For many years, you could ask the lender for a copy of the documents if you lost yours. Most mortgages are now sold and resold so many times that many banks can’t find the documents anymore, so don’t count on them if you need a copy.

Home Inventory
Always keep your home inventory in a safe deposit box, emergency box, or with a friend or relative who lives out of the area. Your inventory should be a detailed list of your belongings, including make, model number, and original price if you can find it. You should also do a video or photo home walk-through to document your belongings. You could keep it in the emergency box, but a large fire could make it unreachable. The inventory is a valuable weapon in the battle with your insurance company, so take the extra step of getting it out of your house.

High-Value Receipts
Your home inventory may not be enough in the event of a major fire. For computers, electronics, fine jewelry, and art, you should also keep the original receipts. You may also need an insurance rider, so have the art or jewelry appraised and keep it with the receipts. Receipts for items outside of their warranty periods should be in a safe deposit box or safe. You could also mail them to a trusted friend or relative. Keep receipts within the warranty period in your emergency box in case you need to make a warranty claim.

If you don’t have the receipts and the purchase was recent, you might be able to get a copy from the store or your credit card company.

Your safe deposit box is probably getting pretty full by now, but it’s better to have too much in there than to realize you’ve lost an important document just when you need it. Tomorrow the series continue with more important documents: family photos and videos.

Although you don’t need to use them regularly, you should have copies of all your vital records in a safe place in case you do need them. Vital records include your birth certificate, marriage certificate, and divorce decree. If your spouse or child died, you may also need their death certificates. If you’re the executor of an estate, you should also have the deceased’s death certificate, too. In case you don’t have them, or can’t find them, here are instructions for getting them and tips on storing them safely.

Ordering Vital Records
Vital records are recorded and stored in the county in which they occurred. Birth and death certificates can usually also be obtained from the state records office. If you’re not sure where the event occurred, start with the state office and then work down from there. In most cases, you’ll need a certified copy of the record, not a photocopy. Follow these steps to find the records you need:

County Marriage, Death, Birth, and Divorce Records

  1. Visit the County Recorder’s website.
  2. Click the link for vital records or birth certificates.
  3. Follow the instructions for ordering your records online. Most states charge a processing fee. You’ll receive a certified copy by mail.

State Birth, Marriage, and Death Records
If the county can’t find your records, then follow these instructions for acquiring them from the state:

  1. Visit the official state website.
  2. Look for a section for residents or citizens.
  3. Look for a link to birth certificates or vital records.
  4. Follow the instructions to complete your online order. The certified records will come by mail. Some states require you to contact county health offices or request the certificate by mail.
  5. If you can’t find ordering information, call your county records office for further instructions.

Some states have contracted with VitalChek to provide online record ordering.

Storing Your Records
Unlike the emergency documents I discussed last week, you have more flexibility in storing your records.

Birth Certificate
Unless you have a young child, you probably don’t need to keep birth certificates in your home. It’s find to keep them in a safe deposit box at a local bank. If you’re planning to apply for a new license, check the requirements a week or two in advance in case you need to visit the bank to pick up your certificate. If you don’t have a safe deposit box, store the certificate in your emergency box.

Marriage Certificate
If you’re a newlywed, then you need to have a few copies of your certificate. I didn’t change my name, so I only needed one copy, but women who change their names will need to mail them to the social security office, the DMV, credit card companies, and other locations in order to change the documents. We needed to show a copy to our auto insurance company to merge our policies, but we didn’t need to show any proof of marriage to merge our other accounts.

Newlyweds should keep the certificates in their emergency box. Couples married more than a year or so can keep them in a safe deposit box.

Death Certificate
If you’re the executor of a recent estate, or a child or parent recently died, you’ll need a few copies of the death certificate to present to banks, insurance companies, and government agencies. After a year, or after all the affairs have been tied up, you can safely keep it in your safe deposit box.

Divorce Decree
The policy for divorce decrees is similar to that for marriage and death certificates. Once you’ve separated all your accounts and unmerged your lives, the decree should be kept in a safe deposit box.

Although it’s easy to obtain copies of your records, repeatedly ordering them can add up quickly. Most cost more than $10 each. Rather than going to the trouble and expense, simply store them safely in a safe deposit box or your emergency box for the times when you do need them.

Last week was a short holiday week and I hosted a carnival myself, so there are fewer carnivals to include in my Carnival Round-up this week.

The Carnival of Personal Finance #160 was hosted by Might Bargain Hunter. Go there to learn more about the history of the US flag. My post about the mid-year financial check-in was included. If you liked that, you might also enjoy Saving Advice’s advice about staying financially motivated.

The Festival of Frugality #133 was hosted by SquawkFox. Check out the adorable pictures of fruit and underwear! If you liked my post about shrinking groceries, you might also enjoy Early Retirement Extreme’s tips for buying loss leader produce.

Along with your will and advance directive, a list of all your accounts, passwords, and contact information is vital for the people you leave behind. Although it’s simple to request a password you forgot, it won’t help your heirs if they don’t know where the accounts are in the first place or can’t access your email to retrieve the requests. The list could also be handy in the event of a major disaster – when you could be without a computer for days.

What to Include on Your List of Accounts
Your list should include all of the following items:

  • Bank accounts
  • Insurance policies
  • Credit cards (even store cards)
  • Investment and retirement accounts
  • Utility accounts
  • Escrow accounts
  • Driver’s license or state ID number
  • Social Security number
  • Mother’s maiden name

How to Create the List
First, empty the contents of your wallet onto your desk. Open an Excel document and label the columns Company Name, Account Type, Account Number, Website, Online Log-in, Password, Phone Number.

Now complete each field. For account type, a basic description like “401K” or “credit card” will do. If it’s an online account, enter the website address and your log-in. For a credit card, the toll-free number is enough.

For your insurance policies, you may also want to add a contact name or the emergency number in case you need to call them on the weekend or following a major disaster.

Each time you get a new account or change your password, update the list to reflect it. You could also keep photocopies of the fronts and backs of all your cards instead, but the list is more concise and easier to read.

Where to Keep the List
Ideally, you should have a copy of the list in your emergency box. You can seal it in an envelope labeled for emergencies or attach it to the back of your will. If you’re concerned that someone could steal the list and have access to all of your info, you could keep the list in a secure file on your computer and enclose the password in your emergency box. If you decide to do this, at least have a list of your insurance policies, account numbers, and phone numbers in the box in case you can’t access your computer during an emergency.

In most cases, your heirs won’t need your account information for the first few days after your death, so you could also keep your list of accounts in a safe deposit box. If you do that, ask your bank for a power of attorney or authorized agent form that gives your executor access to the box. Keep the key and completed form in the box. If you don’t take this step, your heirs may need a court order and locksmith to access the box, which can take a while. Again, keep your insurance info in the box for emergencies where you can’t get to the bank.

We’ve now completed the major documents you need for an emergency. Next week I’ll continue with a list of other documents and items that it’s nice to have, but aren’t absolutely vital. I’ll recommend how and where to store them, and which items you need most.

If you followed my advice from a couple months ago, then you already have your life insurance, auto insurance, health insurance, and homeowner’s or renter’s insurance policies in place. If you don’t, get them now. Use a company like Netquote to arrange your policies. Once they’re in place, you need to keep them somewhere they can be easily accessed during an emergency.

Auto Insurance
Keep a your auto insurance card in your car or your wallet. Each time a new card comes, remove the old ones. It’s not just a neatness thing – if you get pulled over or have an accident, you don’t want to present an expired card or have to sift through a dozen expired cards to find the right one.

Rather than filing the insurance policy and related information in an auto folder along with myriad repair receipts, keep it in an insurance folder in your emergency box. Replace it with the new policy each time you renew or change your policy.

Homeowner’s Insurance or Renter’s Insurance
Your home or rental insurance policies should also be in your emergency box. A disaster, large or small, is exactly when you need the policy, so keeping it in the box ensures that it will leave the house with you.

Each time you receive a policy update, replace the old one in the box. You can also keep a back-up copy in your safe deposit box, but you should keep one copy handy in case you can’t get to the bank when you need it.

Life Insurance
In addition to your primary life insurance policy, you’ve probably got a dozen or so small policies from your employers, credit card companies, and other services. Although each of these policies is only worth $1000 or so, that money could come in handy were something to happen. Instead of stuffing those policies into whatever file is handy when they come, put them in your emergency box with your primary insurance policy. You may also want to give a list of policy names, numbers, and contact information to the executor of your estate or keep it with your will.

Health Insurance
Your health insurance card should be in your wallet at all times. If you travel, keep a photocopy in your suitcase with a copy of your passport. In addition, keep a copy of the card and any back-up policy information in your emergency box. You don’t need to keep the entire policy book, just the basic policy details and contact information. This way you’ll still have the information you need if you forget to take your wallet when you run out of the house with your box.

If you don’t want to keep all of the policies in your emergency box, at the very least keep a copy of the account details pages or a list of all company names, account numbers, and phone numbers. You don’t want to scramble to figure out how to contact your insurance companies in the aftermath of a disaster.

Tomorrow I’ll provide more details on creating your account list in my series on the documents you need in case of an emergency.

Next in my series of posts about the documents you need is the advance directive. This basic document ensures that your wishes will be carried out if you become unable to make your own healthcare decisions. Although the documents have been available for years, they entered the mainstream during the Terry Schiavo case. If you don’t have one, you need one. They’re easy to complete and you can do it free.

How an Advance Directive Works
An advance directive is actually two documents: a living will and a power of attorney for health care. The living will states your wishes should be unable to make your own medical decisions. The power of attorney for health care names the agent authorized to make your decisions and grants them the authority to do so. In most cases, the directive comes into force if you’re unconscious, but it can also apply if you suffer dementia or are otherwise unable to make decisions for yourself. The authorized person can make decisions for you, within the bounds of your stated wishes.

The living will covers most forms of treatment, and allows you to decide in advance whether you would like your life prolonged or not. In addition, you can specify other aspects of your care. The California directive includes a specific form related to your decisions about dementia treatment. You should avoid making your wishes too limited because it could limit the ability of your doctors to care for you. Common decisions include:

  • Use of antibiotics
  • Provision of food or water
  • Dialysis
  • Blood transfusion
  • Artificial ventilation

You can change or revoke your living will and proxy at any time.

How to Create an Advance Directive
If you used a lawyer to create a will or trust, then a living will was probably included in the service. If you don’t have a will or didn’t use a lawyer, you can create an advance directive for free by visiting Compassion & Choices. Simply complete the request and you’ll receive an email with a link to download the form for your state. Review the instructions, and then complete the form. In California, you can either have it notarized or sign it in the presence of two witnesses. At least one witness must be a non-relative.

Before choosing your authorized agent, you should discuss your wishes with them and ask their permission. Most people designate a spouse, but you can designate a parent, adult child, unmarried partner, or even a very good friend. Before I was married, my parents were my authorized agents, and then I completed a new form designating my spouse after we were married.

If you move to a new state, you should complete a new directive because each state has its own requirements. If you’re not married, you should see if there is an additional form for unmarried partners.

Where to Keep Your Living Will
Like your will, you shouldn’t keep the advance directive in a safe deposit box except as a back-up copy. You should keep one copy in your home with your will and other documents. Your primary agent should receive a copy. You may also give a copy to your lawyer or doctor. If you’re entering the hospital for surgery or extended care, you should ask to file a copy with your records to ensure that your requests are met.

Tomorrow the series continues with a discussion of the necessary insurance policies.

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