Have you ever had to look for an important receipt or family record and were left scratching your head as to where you could have left it? Maybe you have piles of papers and don’t know how to keep them easily organized. Perhaps you’re holding on to documents you don’t really need just in case you one day get called from the IRS or some other financial authority. Read on to learn about easy ways to organize important papers.
Recently our Costco membership expired. It was time to renew and thankfully we had a check from our previous year’s membership benefits that would cover the renewal cost plus more. Here’s the deal with the check…Costco issues it a couple of months before you actually need it. You can use it on whatever and whenever you want at Costco. Even though there’s flexibility, I’m kinda funny in that I actually like to save the check and only use it to pay for the membership once it expires. This results in the check getting shuffled around on my desk until my next trip to Costco. More than once, I had a scare that I lost it.
Let me let you in on a little secret: paper is actually magnetic! It’s true! Paper attracts more paper and then they all stick together. Little spots in our homes typically collect all of the random pieces of mail, receipts, and important correspondence from who knows where! Oh, and let’s not forget the cute drawings our littles leave us on a regular basis.
So, you can probably imagine, that once it was time to find said Costco check that I had to do some shuffling, sorting and simple organizing to find it. Enough is enough! Who’s got time for a paper chase. Maybe you don’t have a desk, maybe your magnetic area is a nook in the kitchen or a table in the entryway. We all have these paper hideaways and if you’re like me, you’re probably frustrated enough to want to do something about it. Read on to learn about important papers to keep, ways to store them, and what you can get rid of. We’ll also talk about a process for staying on top of this highly undesirable paper clutter!
Step 1: Deal with the Mess
You can tackle this a number of ways. If you have several piles of papers in various places throughout your house, you can start one room or one pile at a time. Alternatively, you can centralize the paper clutter and take it on all at once. I’m a take it on all at once kind of girl, so I gather the pile from the kitchen and the 5 piles in my office and take it all on at the same time!
In order to deal with the mess, you need to sort into the following piles:
- Act – anything requires action, pay, follow up, calls etc.
- File – anything that is worthy of being kept for a month or more and you want to put in a specified location like a file, binder, or box/tray
- Toss – documents that do not contain personal information and that you want to get rid of (refer to list below to see what items you should keep)
- Shred – Sensitive documents that contain personal or financial information, but that you do not need to keep
Items that land in the Act pile need to be acted on as soon as possible. Pay the bill, Call the Person, Respond to the request. More on this later!
Important Papers To Keep
Check out the infographic later in this post for a list of how long to keep various documents. You can download the graphic at the end of the post!
Step 2: Sort & File
For the Papers that landed in the “File” pile, you’ll want a system to store them. Let’s talk about how to store and how to sort this group.
How to store:
There are many different ways you can store papers. Some people prefer a decorative box with a label. Other’s like to make binders with a specific focus. Traditional file cabinets are still a go-to for many people. Also, if you’re technically savvy, you may prefer to go paperless altogether and use a scanner.
For sensitive documents, you may want to store them in a fireproof box or even a safety deposit box at a bank.
Once you’ve given some thought as to how you’re going to store your documents, consider how you’ll organize them. Below is a list of common categories with the types of documents you’d find in each.
Personal Records – Insurance records, Birth certificates, Death certificates, Marriage certificates, Divorce decrees, Social Security / Social Insurance cards, Military discharge papers, ID cards, and Passports, Wills, Educational records, Life Insurance policies, Power of attorney, and Inventory of your safe deposit box
Home Records – Mortgage statements*, Insurance records, Mortgages, Home improvement receipts, Property agreements, Manuals*, Warranties + receipts, Property tax assessments, Appraisals
Auto Records – Titles, Maintenance records, Mileage records, Insurance
Financial Records – Receipts (especially deductible items and charitable contributions), Deposits / ATM Slips, Credit card statements*, Billing statements, Checkbook ledgers, Pay stubs*, Business / Income documents, Tax returns*, Tax forms*, Medical bills*, Contracts, Tax deductions documentations, Real estate records, Investment statements*, Receipts for major purchases, Retirement plan / Pension plan records*, Certificates for stocks and savings bonds
Medical Records – Medical statements, Doctor/dentist bills, Immunization records, Family medical history, Insurance claims , Medical records
* where possible, keep electronic copies of instead of paper
Step 3: Toss & Shred
At this point, you are through the hardest part. You’ve already sorted through all of your paper clutter and you’ve filed your most important document. THIS is the easy part!
What Papers to Get Rid Of
When I moved to Canada, I packed all of my belongings including my file cabinet and put them in a moving truck to go cross-country. This was the first time in my adult life to sort through papers that I thought I was required by law to save including tax documents that were 10+ years old and years of credit card and bank statements. I was shocked to learn that I didn’t need to hold on to all of this paper clutter! It was so freeing to shred unnecessary documents.
Check out this chart for how long you need to keep specific documents. Note, these are general guidelines. If you have a unique situation, you should contact your attorney or accountant. As a general rule, if you have a question about it, it’s better to save the document and not get rid of it.
If you don’t already have a shredder, you can get one for as little as $30 from Amazon or Staples. If you have a huge amount of documents, you can take them to office stores like Staples who can shred them for you. They typically charge by the pound. Finally, in some cities, there are services that are offered once a month or every few months where you can take your documents and they will shred them for you on the spot in an industrial shredder. I did this before my move to Canada and bonus… the service was free! If you have a lot to shred it is worth it to look into resources in your community!
Tips for Ongoing Maintenance
Now that you’ve gone through all of the clutter, it’s time to put in place an easy way to maintain and organize important papers. Check out these important tips!
- Designate one place in your home to store your important papers
- Establish a regular time to address your incoming documents (I find weekly is ideal for our family)
- Implement the one and done rule. Touch your paper only once. During your specified time, open it and sort into Act, File, Toss, or Shred. Immediately File, Toss, or Shred anything in those piles. Then, be sure to take action within 24 hours on anything that goes in the Act pile. This includes paying bills, making phone calls, or following up with correspondence.
- Purge regularly – Get rid of things as time passes e.g. when you add a new year’s tax documentation, shred the returns from 8 years prior so that you are only holding onto the most recent 7 years.
- Go electronic where possible. Scan receipts or tax documents or get electronic versions of manuals online instead of keeping the paper version.
Paper becomes magnetic and before you know it, a huge pile is attracted to one or more spots in your home. If you don’t manage your paper clutter regularly it can become unruly. Implement these super simple ways to end paper clutter including the steps to Act, File, Toss or Shread and the 5 Easy Paper Management Tips and paper clutter will soon be a thing of the past!
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