As much as we want to clear and get rid of all the paper clutter that we have at home, what worries us the most is that we can’t decide which ones are important worth keeping and which ones should be thrown away. Aside from that, it’s pretty much a scare to lose papers that you shouldn’t have put in the trash. This becomes a big dilemma.

On the other hand, if we don’t throw stuff away, sooner or later it is going to overtake our lives. Now, we have to take action and establish certain perimeters for us to charge of all the paper clutter in our homes. With an established perimeter, not only will you be able to get rid of the things that have no value and are just taking up space and save the space for the more important papers.

Lets us look at it this way, there are papers that we need to keep for a certain period of time just to be sure that we won’t be needing them anymore in the future. There are also papers that should be kept forever and these include very important documents that may be difficult to replace.

You can keep your receipts just until you confirm that your monthly credit card and banking statements have the correct information in them. And if you have a warranty on an item and will need the receipt. In many cases, you can just scan these receipts if you’ll need them for a longer amount of time (say for tax purposes) and get rid of the originals. Even the IRS accepts scanned receipts now.

It is best to shred these kinds of papers because a lot of it contains your complete account number. Be on the safe side of things.

One great way to save long term files (the statements and tax forms you need to keep for 7 years) is to drop everything into a file box (or large envelope, depending on how much paperwork we’re talking about) and store all these papers together in a garage or attic. Then, once a year after tax season is complete, just grab that box or envelope from 8 years ago and shred away!

photo credit: someToast via photopin cc

photo credit: someToast via photopin cc

Things to keep for about a year

Bank, credit card, loan and mortgage statements should be kept for at least a year.

  • When it comes to bank statements, you only have to make sure that they have been reconciled and then you can keep a scanned copy and save it for a year. However, you may want to contact your accountant before actually throwing the paper away because you may need the original copy for tax deductions. Annual statements should be saved for at least 7 years for cases when you are audited.
  • Credit card statements can be kept until you have checked it’s accuracy. If you use them to claim tax write-offs, then save them until tax time comes along. Like bank statements, annual statements should be kept for 7 years.
  • Loan and mortgage need only to be kept year-end statements arrive. When this happens, you should be free to throw away monthly/ quarterly statements to get rid of paper clutter. You can rid yourself of these papers when you paid off the loin. Tax forms, however, should be kept for 7 years.
  • Medical bills only need to be kept until you have paid them off but keep a hold of the final proof of payment for a year.

 Things to keep for more than a year but less than 10

  • Tax documents only need to be kept for 7 years, as the IRS does not audit for more than 7 years back, just as long as you are not suspected of any fraud. If you file electronically, you only need a copy of the PDF version of your filing. So save that in Dropbox, Evernote or somewhere you know is safe and easily accessible.
  • You may plan on selling your house and moving on to a new one. Keep the home improvement bills so that you may be able to answer questions from the new buyer as to the confirmation of a new remodeling or something of the same sort. Also, proof of your money spent can be used to lower taxes. Again, these can also be kept digitally.

Keep Permanently:

This are the ones that you should never, in a million years, throw away. You probably also want to keep a back up copy of them somewhere safe outside your home. Or at least scanned and in the cloud.

  • Birth certificates, death certificates, baptism and confirmation certificates, marriage certificates and all other family documents that you may have with you
  • Legal documents such as wills and medical directives, social security, records of citizenship/naturalization, licenses, trust or POA, passports and copies of contracts that you have entered into
  • Property documents as titles to your house, cars and other properties and insurance for these properties
  • If you and your family have invested in anything, keep all paperwork involved in those activities.
  • Keep annual statements of all sorts because you can never be sure when you need them i.e. for proof of employment, etc

Now go attack that filing cabinet and eliminate some more clutter from it! 😉

photo credit: shehan365 via photopin cc

photo credit: shehan365 via photopin cc

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