NEW YORK (MONEY Magazine) -
You can lose important papers in a catastrophic event like a fire, flood or robbery -- or just through simple carelessness (your passport is where, again?).
Solution: A safe-deposit box and a home safe
To protect against both risks, create two secure storage places: one at home and one at a local bank.
You could spend more than a thousand dollars on an ultradeluxe, watertight safe, but you don't have to. Instead, go to your local hardware or office-supply store and buy a $100 model that's rated by Underwriters Laboratories to withstand intense heat for an hour, which is enough to survive a minor fire.
Use this home safe for anything you might need quickly and can replace if your home burns to the ground or washes away in a flood, such as passports, insurance policies, emergency cash, a copy of your will and airline tickets. Put your papers in Ziploc bags.
Rent a safe-deposit box for items you rarely need, such as titles, deeds, birth and death certificates and stocks. Also, put in records that you'd want to have if your home were destroyed -- a list of your bank and brokerage accounts, a copy of your will (or give one to your lawyer) and an inventory of your valuables.
Keep in mind that the bank's insurance won't necessarily reimburse you in the unlikely event of theft or flooding, so if you want to keep precious jewelry in your safe-deposit box, insure the contents with a rider to your homeowners policy.
Investment: A trip to the store for the $100 safe; about $35 a year for the safe-deposit box.
The payoff: Peace of mind -- and room for more socks!
Problem 6: Too many credit cards.
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