If something stops you from accessing your financial accounts and paying bills, can someone else take your place?
At first blush, this might seem like a silly question. Why would someone need to pay your bills on your behalf? But it’s an important mental exercise. You never know when you might be incapacitated and unable to manage your accounts.
A financial scrapbook gives the people in your life a key to your finances. They can refer to this album to manage their money in emergencies.
What is Financial Scrapbooking?
Financial scrapbooking is a way to be prepared if an emergency makes it impossible for you to log into your accounts and pay bills as usual. Your scrapbook contains all the essential login credentials and account information someone might need to perform this chore.
Financial scrapbooking is less about celebrating and recording family memories, like a traditional album, and more about creating a record of your financial profile. This doesn’t mean you can’t add your usual scrapping flair when crafting a visual representation of your financial world. You can still create a beautiful album as long as you cover the basics of your accounts.
Why Should You Make a Financial Scrapbook?
Say you spend time in the hospital, and you’re too ill to track due dates or transfer money. If you have a financial scrapbook, a loved one can open this album and take care of business.
When a loved one uses your scrapbook, they can transfer money to your landlord or mortgage company, online direct lenders and credit card companies, and your utility and phone providers on time.
Making prompt payments is crucial, even if you are in a hospital bed. This is especially true if you took out an online loan when you needed help covering those bills in your scrapbook. You want to make sure nothing stands in your way of paying your loans on time.
While some financial institutions and companies may have compassionate policies that alter due dates or amounts owing in emergencies, you can’t guarantee they will offer financial assistance. Besides, these policies are only available if you talk to a representative, which you might not be able to do in an emergency.
If you don’t qualify for these programs, a scrapbook is vital. It protects you from late fines and delinquencies that can interfere with services or impact your credit.
A Step-by-Step Guide to Financial Scrapbooking
Here’s what to do to make a financial scrapbook of your own.
Step 1: Gather Your Financial Essentials
Make a list of all your financial accounts you will need to include in your album. Here are some examples to help you get started:
- Checking and Savings Accounts
- Personal Loans, Lines of Credit, and Credit Cards
- Monthly Bills
- Insurance Policies
- Will, Trust, and Powers of Attorney Documents
- Family Medical Records
- Pet Veterinarian Records
Step 2: Add the Details
For each category, include the crucial details that make your financial scrapbook informative and practical:
- Account number and name
- Due dates for bills
- Login and password details for online accounts
- Answers to security questions
- Typical bill amounts, if possible
Step 3: Update Regularly
Update your budget scrapbook regularly. Add new accounts as you make them, and remember to update passwords when you change them.
Scrapbook for Financial Security
A financial scrapbook gives you peace of mind, knowing your family or friends can handle your bills while you’re incapacitated. Give it a shot! Your love of scrapbooking can help you create an emergency preparedness kit for your finances.
