Day 8 - What to Keep

Welcome to Day 8 in our Clutter-Free Challenge.

Today we are going to continue to deal with paper clutter.  If you have paper under control, I hope you’ll consider sharing some of your tips in the comments on my blog. You can do that by clicking on the title of this email.

Yesterday, I shared my practice of sorting papers into similar stacks. This helps me break down an overwhelming project into smaller pieces.  My overloaded brain needs that! Now, I want to share some tips for managing paper that we need to keep, and identifying paper we don’t need to keep.   I know some people are striving for a paperless file system, but that’s just not realistic for everything.  And so I’ll be presenting ideas for what to do with a hard copy of paper and an electronic copy.

A filing system is critical for keeping your home and office free of paper clutter.  Filing cabinets don’t have to be clunky gray metal.  They can be lovely pieces of furniture.  Purchase one larger than you think you need, and solid enough to not break when full.
Then, invest in a combination of hanging files for categories, and individual files for specific items.  The key is to buy enough so you don’t feel stingy with them.  Then, create file folders for papers you need to keep.  If you are just starting to file, I suggest you label your files in pencil in case you want to make changes as you go along.

How you create categories and individual files is completely up to you.  It just needs to make sense … to you.  Where will you go looking for your auto insurance documents?  In the “Auto” category or “Insurance” category?   Where will you look for health records for your puppy?  In the “Pets” category or “Health” category?  Don’t try to work against the way you think … work with it.

Regarding saving documents electronically.  This is a practice I started last year for certain documents. One of them being bank statements.  My bank only makes monthly statements available in my account for 18 months.  However, I need to keep them for seven years for tax purposes.  So, I download a PDF of my statement each month and save it on my computer. Some people scan documents and save them.  This works for papers that don’t need to be originals.

If you want to eliminate paper statements, create a folder in your documents for “Statements.”  Then, create subfolders for each account you maintain (bank, investments, credit cards).  Then create another subfolder for each year, and store statements by month within the appropriate year.

But what if my computer crashes?  you ask.  Good question.  For years, my husband and I backed up our computers to an external hard drive once a month … when we remembered.  That was until we learned about Carbonite.com.  Now we pay an annual fee (well worth it) for a remote back up that works constantly.  So in case my computer dies, I’ve got all my work, photos and more (within a few hours of when saved) backed up safely.  And I can access it remotely.

If you want to reduce the paper you need to file, this is an awesome way to safeguard electronic files.  To learn more about the options for online backup, here’s an article on PCMag.com reviewing different options.

For the rest of this post, I’m going to address some common items of paper and how long they should be saved – whether paper copies, scanned copies or PDF statements.  Please note, these recommendations do NOT apply to a business.  And they may not apply to unique situations.  I used IRS.gov for some information and my accountant for the rest.  If in doubt, please check with your own accountant.

Tax Returns (and supporting documents, including bank statements): Keep for seven years.

Initial investment records: Keep until you withdraw the money entirely, as these will be needed for tax reporting.

Receipts for purchases: If you purchased the item with a credit card, save the receipt until it has shown up correctly on the statement.  Once you have been correctly billed, shred the receipt, unless: you need it for the warranty or service agreement.it’s an item of value.  Then either keep the receipt or record the purchase price in a ledger book in case you need it for an insurance claim.it was for a gift, or item that might be returned.  Save it until you are certain the item won’t be returned. Investments/Banking/Retirement Statements: Keep the quarterly statements until you receive the year-end statement.  Keep year-end statements with tax documents.

Paycheck Stubs: Keep for a year until you get your year-end W-2.  If everything is correct, shred the paycheck stubs

Medical Records: Save for seven years with tax documents.  However, it seems I’m occasionally wanting to remember when something happened and have had to go back through past year’s documents.  But what I should have done years ago is keep track of illnesses, surgeries and procedures in a record-keeping book of some kind.  If this idea appeals to you, look for record-keeping journals, or just buy a few smaller spiral notebooks.

Home Records: Keep all purchase and sale documents.  Keep all home improvement expenses and those related to selling your house.   When you sell your house, you’ll want these documents for tax purposes.

Automobile Expenses: Keep all purchase documents and major repair receipts in case you sell the car. You’ll want to pass these along to the new owner.

Permanent Storage: There are always documents you want to store in a secure fire-proof location.  This list can change based on your individual situation.  But experts generally agree on the following: Birth certificatesWillMarriage certificateAdoption certificatePassportsSocial security card

If you can believe it, we are halfway through our Clutter-Free Challenge.  I know this is a lot of work.  But I can promise you that once you make the effort to create a good filing system, maintaining it is a fraction of the work.

Please join me tomorrow when I wrap up the section on paper clutter with some tips on miscellaneous items.

Grace & Peace,
Glynnis

Heavenly Father, I’m starting to feel overwhelmed again.  You know how many times I’ve tried to get control over the paper in my life and have given up.  Help me to break this problem down into manageable pieces and show me what to do first.  With Your help, I can bring de-clutter and bring order to the paper in my office and home.  In Jesus name, Amen.