I'm trying desperately to declutter my home. I've realized my problem is that I keep to much in the way of "paperwork". Absolutely what needs to be kept (the obvious is IRS tax forms) and for how long?
Examples of paperwork I have.....
* notes from classes (I'm in school for nursing) that have been completed
* explanations of benefits from insurance
* the carbon copy of checks
* warranties (I keep them, but never use them)
HELP!!
Hi merasyph, right off-hand I'd say you don't need to keep ANY of the examples you listed.
Liz Pulliam Weston does an article from time to time about what constitutes important paperwork, and how long you should keep it. You can look in her article archive on MSN Money. Here is a link for one article :
http://articles.moneycentral.msn.com/Banking/BetterBanking/OrganizeYourFinancialLife.aspx?page=1
and here is another:
http://articles.moneycentral.msn.com/Banking/BetterBanking/PurgeYourFinancialPaperwork.aspx?page=1
just copy and paste those into your browser. :-)
I wouldn't keep any of that stuff either, but if you are worried about throwing it away you could scan it all, then it wouldn't be taking up space in your home. I don't even buy checks with the carbon copy anymore b/c the only thing I use them for is shopping at Target(so I get my employee discount, we don't get it with a regular debit card and I don't usually carry cash, plus the checks were free).
If any of those warranties are current you might want to hold onto those. I would be worried that something would happen if you got rid of them and something broke, but any outdated ones should go. You could probably scan the warranties also. if it was me the warranty papers would be the only thing I would keep out of that list.
I don't keep bills once they are paid, I don't keep medical bills once they are paid either. No checks, or receipts unless they are for big purchases. I don't balance my check book(just keep a really close eye on it and don't spend a lot of money) and as soon as I am done with a glass I get rid of the books and all the class work, or I scan it or save it to my harddrive if I think I might need it later.
The only absolutes are vital documents. Most should be kept for a lifetime including your IRS returns, not including your support records.
Now, support records. I keep for 10 years.
And I keep them in a fire safe, nicely tucked away in a quiet location. Out of site, out of mind.
I know, 10 years is blasphemy in this digital age. But I got tired of all the indecision. It was causing a whole lot of clutter, in my head and in my house. Some experts advise 3 years, others advise 7, so I just decided 10 was good round number. (I own a business, if you don't 7 or 3 would probably work.)
Here's my logic.
For legal and insurance matters, a company or individual has an certain time period where they can dispute or file a claim. Generally, that time period is based on the statute of limitations on property damage in your individual state.
That's why I keep insurance records with my tax records.
IRS says 3, 6, or 7 unless they expect fraud, then forever. Whatever.
Tax records are everywhere. That is why most folks have a hard time tossing papers. If you are claiming a deduction, you need support records. Know what you are deducting.
You can find support records in a few places.
Legal stuff. Including records that support ongoing child support, alimony or court ordered actions. While these records may also be related to your taxes, you may wish to retained these indefinitely for legal matters. Talk to your advisor.
Insurance stuff. Policy documents (yes, even expired for the reason mentioned above), as well as records including accident reports and claims, receipts and correspondence. Benefit stuff is kind of important. You need to know what your covered for.
Financial Records. Cash and credit statements, investment accounts and retirement accounts are mostly tax related. While many experts suggest it's safe to toss after accounts have been reconciled or after only one year, I hold onto my cash and credit statements for at least 7.
I know, blasphemy again.
These papers are actually tax related. They are an evidence of your spending. Some may be insurance related. Your most important financial record is your checkbook.
I trust my bank to hold on to canceled checks, but if I ever changed banks I would worry how easy it would be to access those.
Medical expenses and correspondence may be tax related if you are claiming the deduction. However, families with special needs may also wish to keep these papers as a health record or for filing insurance claims. Insurance payments and reimbursements can be tax related if you are taking the medical deduction. (That's why keeping your end-of-year w2 is important)
Ownership records, including invoices for home improvements, receipts for large purchases and maintenance spending are needed to support warranties, insurance and tax needs. I save big purchase receipts in my home inventory.
And home improvement records should be kept for tax support even after a house is sold.
Personally, I staple receipts to warranties and file them in my home inventory.
I don't feel the need to follow that practice for low ticket items. I set my personal limit at 100 bucks.
In addition, if you are taking a home office deduction you may need home utility and home maintenance records.
So, that's it in a nutshell.
I know everyone is different. There are many folks who say why bother keeping the paper at all, store digitally. But, that takes a whole lot of time too. There have been countless times where getting my hands on a hard copy quickly made my life so much easier.
I know it seems like a whole lot of paper, but the reality is if you're only keeping what you might need, it's not a whole lot.
It depends where you live. I think Americans need to keep far more in terms of paper work than most people especially when you factor in medical stuff and tax returns.
I have a large amount of documents that need to be scanned in but I'm waiting to buy a scanner as, sadly, money doesn't grow on trees.
All of my bills are paid online and I keep a PDF copy of all banking and bill transactions in the "banking" section of my mac cloud. I don't keep the paper component of the bill. I haven't been doing this for long enough to say how long I would keep them for though I suspect it will be up to 5 years as we are posted overseas and I'm not 100% aware of the tax implications once we return to Australia. Still, there is no physical clutter and my cloud is well organised so no clutter there either.
With insurance I would ask for an emailed copy of the benefits. I actually can't think of the last time we got hard copies of anything... even a recent loan document was emailed not posted.
My elderly aunt just tried to sell five acres of land that she inherited from her deceased husband. Her deceased husband had purchased the land with cash in 1979, long before they married. In trying to sell the property, my aunt discovered that the deed was never recorded, and there is no record of the purchase.
She may have gotten lucky, because her current lawyer located the 1979 seller, who agreed to sign a quitclaim deed to her.
Whatever papers you elect to keep, don't forget to pay special attention to the big ones: deeds (make sure they are recorded), titles to automobiles, insurance contracts (and proofs of payment), etc.
I tend to be compulsively organized or just the opposite.
The District Superintendent from the town where I worked called me one day; he was frantic.
"The State of Illinois lost your teaching certificate. Without that you cannot teach and I'll have to let you go! You better start digging!"
Can you imagine? Illinois lost my teaching certificate!
I went home. I opened up my file cabinet. I pulled out a file labelled "Certification" and inside was my teaching certificate!
I am glad I was compulsive the day I filed that piece of paper.
As a member of the nursing faculty of a community college I would recommend keeping your course work until after you pass your nursing boards. You will need those to study from and to prepare for boards. Good Luck!
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