The Business of Growing Up

So you've finally done it. You've reached that wondrous state known as adulthood! You may still be living with Mom & Dad; you may be living in a college dorm; or perhaps you've moved out into your own place. Regardless of where you live, things are different now that you're "all grown up". If you're my child, you know that I've always been the record-keeper at our house. But now that you're 18, you'll be buying your own stuff, entering into contracts and learning slowly but surely how to do all the stuff that grown-ups get to do in the course of living, working, going to school. Along with all that, you're going to have to start keeping some very important records of your own. So, here it is - my "crash course" in what to keep, what to file into your own permanent record, and how to create your own paper trail!

To start with, you're going to need a file system. And since you probably won't have too terribly many categories at first, you can start small. I would recommend one of those colorful (or not) accordian files with 19 or 20 sections, A-Z tabs or not, with a latching top. These are available in the office supply section at WalMart for under $10. Or a simple file box will do, with some folders to organize all your stuff. On to what you need to put in there!

#1-School records: You're in college now - with profs instead of teachers and no one nagging you to do your homework! And now there's no one but you to keep up with all the official stuff. What needs to go in here?

• College Applications and Acceptance Letters! Well, technically, once you've been accepted and chosen a college, you don't have to keep letters from other colleges. Maybe you'll want to keep acceptance letters because, after all, it's nice to know someone else wants us!
• Scholarship Documents. Anything that involves someone else ponying up for tuition and books should be kept in your file!
  
• Degree Plan. As soon as you've met with your counselors and made an outline of the next four years, file away a copy that you can refer to whenever you need.
• Credit by Exam. If you've been able to take a couple of tests and receive college credit, congratulations! Those are classes you don't have to take and don't have to pay for! For heaven's sake, keep a copy of the letters and certificates that show your credit. It would really stink to get right up there toward graduation and have the school tell you that you didn't take Spanish 1000, when you know you got credit by exam. And you need to be able to go to your faithful filing system, pull out your proof of credit and say hey, you! I have those credits and here's proof!
• Miscellaneous. Correspondence from your school, copies of grade reports and your college transcripts should all be filed away for safekeeping!

#2-Tax Stuff: You're going to be earning income now if you haven't already, even if it's only a part-time job. If you're not in college, you'll be earning full-time income. And you don't earn income without paying the government "their share" in the form of taxes. Being an accountant myself, I strongly recommend tracking your income and your expenses on your computer using a good bookkeeping program. My favorite is Quicken Starter Edition 2010; and I've been using their programs for many years now. Whether you decide to take that step or not, there are documents that you will want to keep concerning your earnings.

• W-2's and 1099's. At the beginning of each year, you'll be getting these official tax documents from anyone who has paid you to work for them during the year just ended. You'll use these to prepare your tax return and file them away for future reference.
• Tax Returns. Once you've made more than a couple of dollars, you'll be required by law to file a tax return. Always keep copies of this return along with an documents that would serve as documentation of your taxable income and expenses. (In Texas, we don't have state income taxes, but if you live in a state that does, you'll need to keep all that stuff too.) You absolutely NEED to keep tax returns for a minimum of 6 years, but I'd venture to guess that I've never thrown away any of my own tax returns. (Of course, I am most likely what most would term a pack rat.)
• Correspondence from the IRS. Any time the IRS or your state tax authority sends you anything official, addressed specifically to you, you'll want to put a copy in your file, along with any replies you send and notes of all communication you have with them.
  

#3-Miscellaneous: Since you're just starting out, a lot of stuff will be "miscellaneous". As you get more stuff and more papers that all relate to one thing, you'll want to start a new folder or category. But for now, you want to file papers here that don't have another home.

• Receipts for stuff you buy. Unless you're running a business and saving receipts to use as tax deductions, you'll only need to keep a receipt if the item is something you may need to return, or something which has a warranty attached where you will need to show proof of purchase.
• Health records and health insurance information
• Any contracts you sign and copies of contract cancellations.
  

And that's enough for now. The system grows as you do. There are books and blogs and systems out there in crazy numbers. You can check into them as you need them. For now, the important thing is to start off right. Have a place for all your paperwork. And put your paperwork in its place!