You'll find that an up-to-date inventory will help you get your insurance claim settled fairly quickly and accurately. An inventory will also document losses for your income tax return. And, finally, it will help you arrive at the correct dollar amounts regarding lost or damaged items.

Fourth of July is coming up soon...so you may have a little extra time off from work. Set aside a morning and take snapshots or a video of all your possessions. Go room-by-room.

Don't forget...

Your basement, attic, garage, tool shed or, if you have one, an off-site storage unit. Open all closets, drawers and trunks.

Items that are often overlooked: ATVs, boats, deck, exercise machines, grills, landscaping, motorcycles, outdoor furniture, patio, planters, silverware, sports equipment.

What to note...

In general, your objective should be to note each item's condition, age, where purchased, the original price and the replacement value.

In the process, record serial numbers and models for such items as computers, printers, TVs, VCRs, dishwashers, washing machines and the like.

When it comes to clothing, it's a good idea to note how many you have in each general category: suits, jackets, shirts, coats, dresses, shoes, athletic clothing, children's clothing, etc.

For really valuable items...

Some of your big ticket items, such as fur coats, jewelry, paintings, antiques, other art work, rugs and collectibles may need to be appraised...and they may need to be insured separately. Check with your insurance agent.

Storing the finished inventory...

Whether you audio tape, video tape, click snapshots or use an inventory that's part of a personal finance software package, you should have three copies of both your handwritten notes and the visual/audio inventory.

The first copy is for your safe deposit box. But in case your bank was flooded, as happened recently in Iowa, the second copy should be left with a friend or relative who does not live nearby. The third copy should go in your disaster kit (Click HERE to read what else should be in that kit.)

TIP: With each copy of you inventory, include a copy of your homeowners (or renters) insurance policy.

Finally, don't neglect to update your inventory when you move, acquire or sell possessions, give away things or donate them to charity.

To download a free Homeowners Inventory software package, contact the Insurance Information Institute at: http://www.iii.org/. You'll see the link on the home page.

- Nancy Dunnan