Forms, statements, bills, pay stubs, receipts ... They all amass on your desk in an ever-mounting parchment pile. Whether you’re a pack rat or serial purger, having a paper management system to deal with document overload can help you deal with the influx more efficiently. Here are some guidelines.
Forms, statements, bills, pay stubs, receipts ... They all amass on your desk in an ever-mounting parchment pile.
Whether you’re a pack rat or serial purger, having a paper management system to deal with document overload can help you deal with the influx more efficiently. Here are some guidelines from a panel of experts including Sue Becker, owner of From Piles to Smiles in Downers Grove, Ill., email@example.com; and Sarah Walters, owner of Calm and Collected in Elmhurst, Ill., firstname.lastname@example.org.
WHAT’s in your filing cabinet: Bank deposit/ATM withdrawal slips.
WHEN you can get rid of them: Once transactions reconciled with bank statement.
QUOTABLE: “People feel like they need to keep them, but they’re a nuisance. As soon as you see it’s posted to your account or recorded in your registry, dispose of them.” — Walters
OTHER TIPS: Copy the reference numbers off of the slips into your registry.
WHAT’s in your filing cabinet: Bank statements.
WHEN you can get rid of them: After 3 years, during which you might need them for tax auditing purposes.
QUOTABLE: “I recommend signing up for e-statements from the bank. That way, you can always access old statements online and print if need be but they won’t clutter up your space.” — Walters
OTHER TIPS: These can be proof you paid a bill if you don’t have a receipt and also could be needed for a mortgage loan to prove the money you intend to use for a down payment is not borrowed. — Becker
WHAT’s in your filing cabinet: Credit card statements.
WHEN you can get rid of them: Once checked to see if last payment received and new charges verified.
QUOTABLE: “(But) retain any paid bill on which there was a disputed charge, a waived late fee, fraudulent card use or any other problem so you have supporting information if your credit report is impacted.” — Becker
OTHER TIPS: Save statements for credit cards that are used for tax-deductible expenses. And in divorce cases, bills may be used to determine which spouse pays a child’s expenses and can claim the child as a dependent. — Becker
WHAT’s in your filing cabinet: Utility bills.
WHEN you can get rid of them: Once you receive the next bill and proof the account was credited for correct amount.
QUOTABLE: “One reason you might want to keep the most recent 12 Nicor or Comcast bills is if you’re planning on selling your house. Potential buyers might want an indication of how much they can expect to spend to heat the home or what they’ll shell out for electric.” — Walters
OTHER TIPS: If you do online bill pay, however, the bank will have records of payment amounts and dates, which can curb the paper influx. — Walters
WHAT’s in your filing cabinet: Pay stubs.
WHEN you can get rid of them: One year.
QUOTABLE: “Once you get a W-2 from your employer and once everything matches up and is a-OK, then you can get rid of them.” — Walters
OTHER TIPS: Pay stubs can be proof of income or employment if you’re applying for a loan. They can also list union dues that don’t show up on W-2s. Hang on to copies of expense reports and submitted receipts, though, because even though these amounts often are reimbursed on paychecks, you need documentation if you’re writing them off. — Becker and Walters
WHAT’s in your filing cabinet: Tax returns and supporting documents.
WHEN you can get rid of them: Seven years.
QUOTABLE: “Basically, any year-end stuff you receive in January, interest paid, taxable donations, any type of receipts for write-offs and proof of business expenses — keep it together with your tax return sorted by year.” — Walters
OTHER TIPS: The IRS has three years to audit your return to see if you owe additional tax. If you underreport income by 25 percent or more, that statute of limitations increases to six years. If you do not file or file a fraudulent claim, they can audit any time. — Becker
WHAT’s in your filing cabinet: Medical/health insurance records.
WHEN you can get rid of them: Once everything clears and there are no bill disputes.
QUOTABLE: “Of course, keep your policy and explanation of benefits for the year. But there’s no need to really hang onto a $20 co-pay receipt for a pediatrician’s office when your child has strep. However, you do want to keep documentation of a chronic condition or ongoing illness as support for your medical history. Then you can say ‘Oh, yes, I had this surgery and still have back pain.’” — Walters
OTHER TIPS: If you qualify for the medical expense deduction on your tax return, save your bills for the same retention period as applies for your tax returns. Sort medical/health insurance records into subcategories by family member. — Becker and Walters
WHEN YOU CAN TOSS THESE EXTRAS:
- Contracts or legal documents: Never
- Retirement and pension records: Never
- Real-estate/property records: Ownership period + 3 years
- Home improvement records: Ownership period + 3 years
- Investment records (cumulative, year-end summaries to substantiate gains and losses related to sale of investment): Ownership period + 3 years
- Vehicle records: After the vehicle is sold
- Canceled checks: Go paperless and these are available online if needed
- Paid invoices, bills: Once warranty expires
- For archived documents you aren’t likely to refer to regularly, don’t feel obligated to store them in your filing cabinet. Keep a storage bin or plastic file box in the closet, basement or attic, and out of your way.
- If you decide to keep your check registers to help you track down canceled checks, write the start and end dates and first and last check numbers on the front cover.
- Shred anything with personal ID numbers including account numbers, tax IDs and social security numbers to help prevent identity theft. This applies to credit card offers with reservation codes as well.
- Create a hanging file labeled “In Case of Emergency” with a red tab to make it stand out. Include bank account numbers and passwords; phone numbers of your attorney, accountant, financial planner and investment broker; and the location of important documents such as insurance policies, will, power of attorney, safety deposit box keys or the combination to a lockbox.
- Keep receipts if they provide proof for a warranty claim. Staple them to the warranty certificate or product guide.
- Hang onto receipts for expensive articles of clothing for documentation of value in case something gets lost or ruined by the dry cleaner.
- Keep receipts for furniture and other big-ticket items with photos and a household inventory in a safety deposit box or fireproof cabinet to document replacement value.
1.) Recycle junk mail immediately. This will help eliminate deceptively overwhelming piles that encourage procrastination.
2.) Create an inbox. By using a paper center, you’re designating a landing space where all family members know action items should be placed.
3.) Use a file sorter or stackable trays. Place bills in one slot so they never are lost or overlooked. And create a hot spot for other urgent papers like a field trip permission slip that needs to be signed or an invitation that needs an RSVP. Or tack these up on a bulletin board.
4.) Spend 10 to 15 minutes a day tackling the inbox. Set the microwave timer so you know there’s an end in sight. At the end of the week, up this to 30 minutes to ensure all your loose ends are tied up.
5.) Be realistic about which coupons you’re likely to use or places/entertainment you’re likely to check out. If the chances of you going on that sight-seeing tour or attending that play are slim to none, throw the flier out. Plus, most of this information is easily Google-able if you decide at a later date to go and need to look up times and locations, prices or a box office number.
6.) Have a basket or rack for magazines and newsletters. This way, you won’t be sifting through leisure reading material when you’re scrambling for an important document.
7.) Keep a pocket folder or accordion file per child for school paperwork. This is where homework helpers, parent-teacher correspondences, school calendars and other paperwork should be stored.
8.) Choose school-year mementos selectively. Don’t save every single quiz and craft project. Rather, hang onto a story your child wrote that reflects his or her personality or an A+ test that required a lot of hard work. Put these projects in a memory box or manila folder, labeling things by grade.
9.) File tax-related documents, receipts and statements in one file folder as they come in. This way, you aren’t scrambling for paperwork the night before an appointment with your accountant, inevitably forgetting some pertinent items.
10.) Aim for file folder categories that are general enough that they don’t catch only a paper or two (“Warranties” over “Camera warranty”) but specific enough that it’s not busting at the seams (“Credit card statements” over “Money stuff,” which could encompass bank statements, investment portfolios, etc.).
-- Organizing plan courtesy of Sarah Walters
Chicago Suburban Newspaper Group