Project Organization: Financial Documents

I have held on to every piece of paper since I graduated from High School (almost 10 years ago, YIKES!). My file folders are overfilled, and I started wondering how long you’re supposed to keep financial records. After consulting one of my favorite financial gurus Suze Orman, here is what I came up with:

Utility Bills – Hold on to for one year. If you have a home office and claim that on your taxes hold on to it for 3 years (just in case you get audited by the IRS).

– Pay Stubs (1 year) until you get the W2. As long as it’s accurate you can get rid of the stubs and just keep the W2.

– Bank & credit card statements – 1 year. If you plan on applying for a home or car loan, you should keep these records for 2 years.

– Investment Statements – monthly/quarterly, only keep the updated one, shred the others.

– Tax records – 3 years for returns and supporting documents (receipts). The IRS can challenge your tax records for up to 6 years, so if you’re a worrier like me, you may want to hold on to those records for that long.

– Insurance Documents – keep all of your insurance/forever documents & warranty papers together for the duration of the contract. Be sure to keep duplicates both in your home and another safe place (e.g. a secure place at work or you can buy a safe deposit box). Think car titles/registration, marriage license, birth certificates etc.

OTHER USEFUL TIPS:

– Make a copy (front and back) of every card in your wallet. Keep it in the safe place. In the event you get robbed or you lose your wallet, you have easy access to turn off all your financial faucets. Write above each copied card, I write the account number and the phone number to shut it off.

– Consider a color coded filing system. Basically every account gets it’s own folder (for example Bank of America Checking, Bank of America Savings). Financial documents go in green folders. Work related stuff goes in orange folders and then the folders are all filed together in alphabetical order. Don’t think too long about what to name your folders. Go with the first thing that comes to mind (e.g. you can either label a folder “Cable” for Cable TV or you can name it after the company “Comcast”). Whatever system you go with try to keep it consistent. There are multiple colored file folders out there, so choose the color(s) that work best for you. My color system also translates into my calendar (each area of my life is color coded).

– Set up an annual appointment to review & purge your files! I generally like to do this kind of work right before the New Year, but you can go with whatever works for you.

– Never ever throw papers away. Invest in a good shredder and shred those babies.

Happy Organizing!

Be sure to check out Part 1 in this Project Organization Series: Countertop Action File: https://donnienicole.wordpress.com/2010/06/20/project-organization-countertop-action-file/

2 Comments

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2 responses to “Project Organization: Financial Documents

  1. I do most of this stuff and live and breathe Excel spreadsheets and ledgers for keeping up with money. But my mother is such a huge packrat so I’ve grown up throwing everything away after dealing with that. But one thing I didn’t think of was making copies of all of my wallet cards. Great idea! I just figured I’d go on the Internet to cancel cards should they be stolen, but your idea is better.

    • I’m glad the copy of contents in your wallet was good advice. I totally understand living with packrats. I used to be very packratty about teaching lessons/materials but recently learned to sort through and only keep the good stuff. Thanks for leaving the comment! Appreciate you!

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