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I want to share something my husband has been doing for several years. When we get the first statement from any business, he clips off the return address portion of the envelope or statement. He then cuts out the name of the business and slips it into the little plastic sleeve on the green hanging file folders. Neither of us is able to write small enough to get it on those little tabs. It takes a few minutes but it only has to be done once per business. We've had several people remark about it so I thought I'd share it.
By MartyD from Houston, TX
Pretty smart, Marty!
While saving old tax claims is not only wise but a necessity, how often are these forms really reviewed? For most people the hopeful answer is never. The moment the taxes are in the mail place all receipts and copies of the tax forms in a large envelope, label it "2005 taxes", and seal it. Should an audit or other evaluation require the forms to be produced, they will be neatly together in the filing cabinet without any worry. Each year remove the oldest year and shred the entire envelope.
How long should a person keep the forms? While there is no concrete answer, many CPAs suggest that seven years is more than enough. For most people who file accurate tax returns without any special circumstances, the statue of limitations expires three years after the date of filing.
No, some things do not need to be saved. Items like old checks, monthly bank statements, credit card bills, and utility bills are catalogued by the company issuing the bill/statement. Should the need arise, they can pull up the account history easily. Shred utility bills the moment the payment is posted to the account. Credit card statements fall into the same category unless there is a tax deduction on them.
Other items absolutely need to be saved. Receipts for major purchases such as household improvements or jewelry need to be kept for insurance or resale. All warranties and receipts for the items under warranty should be saved as long as one has the items. Mortgage statements, vehicle pink slips, and contracts should be kept indefinitely.
Most paperwork is kept for tax purposes. Pay stubs need only to be kept for the tax year. Once the amounts are checked with the W-2 form issued for that year, all pay stubs for the year can be shredded. In other words, only keep the current year for which you have not yet filed taxes.
Other items which can usually be thrown away but might be kept for taxes are credit card statements. Often these list items purchased rather than amounts spent like store receipts. This helps to prove that a person spent $145 at Staples for business supplies rather than on an iPod.
The final note about cleaning out the filing cabinet falls into the heading of safety. No, not safety from an IRS audit or a late charge on the light bill - safety from identify theft. Always shred discarded documents. A stolen identify is far worse than a missing tax form from 1988.
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What to do with all the information, such as reminder notes merchandise, doctors, coupons, everything? I always jot this down on scraps of paper which I can seldom find.
I have an 5x8" spiral bound calendar that I use as my "bible". In it I write not only on the monthly page of what has to be done, but on the daily pages I write lists of things to remember. I also staple, or binder clip, all of my little notes on the front of the calendar so I can use them until I've written them down somewhere, or finished with them. I also carry a picture of my husband and me on our wedding day. That's for inspiration on a lousy day.
I use a regular spiral notebook like kids use in school. I jot everything in it that I need to do, remember, buy, etc. When done I either X it out or if it is a separate page and I never will need it again, i.e. a grocery list I tear and toss. Other memos, i.e. MD appts, etc I just keep all in the notebook. These notebooks are several for a $1 in back to school sales. Buy a bunch in August.
I keep a pocket organizer in my purse where all reminders and appointments are recorded when I make them and coupons and ads are kept in a small organizer that I keep with my canvas shopping bags. Larger notes and postcards, etc., are paperclipped to my large kitchen calendar near the appropriate date.
I use a spiral notebook, and scotch tape to tape all my bits of paper into it instead of rewriting all that info into the spiral.
How do I select "what" business or personal papers to trash? (I am a "compulsive hoarder").
By Parker1981 from Phoenix, AZ
Keep credit card statements, utility bills, statements for car insurance, pay stubs, etc. about a year. Review them as you go if possible and then after a year, trash.
Keep all documents related to any real estate or businesses you still own (deeds, tax statements, etc), life insurance policies, car titles & associated paperwork (that you still own), your income tax returns, birth and marriage certificates, divorce papers, death certificates, military service papers, certain medical papers like shot records or surgeries, major accidents, other litigation items such as law suits, forever. (Some people may argue that you don't need to keep tax returns for only 7 years, actually you need to keep the related paperwork for those 7 years of returns if you itemize (in other words you can trash the itemization items, receipts, etc after 7 years), but a couple of CPAS I have known suggested that I keep the actual returns forever.) And if you ever should need one, the IRS charges a hefty fee to give you a copy and they will charge the hefty fee for every return you request.
Keep product warranties until they expire or until you no longer own the item. Keep pet paperwork until you no longer own the pet. Separate pictures and articles away from the important stuff.
Consider carefully how much info you keep. If you save recipes, articles from the newspaper, etc. You can end up with huge amounts of paper that clog up your life that you never do anything with!
I have 2 bags where I keep important papers. One is very important papers and has my tax returns, birth certificate, pass port, etc. (Which you might want to consider putting in a safe deposit box).
The other one is semi-important papers, mostly warranties and things that will eventually expire or become obsolete (rental agreements when I had an apartment), request for time off from work, etc. It helps to keep the really important away from the not so important items.
Stay on top of junk mail, by reading it as you come in the mail and tossing it right away (I recycle it.) Always open junk mail though, because occasionally it is not junk mail and you could be tossing something more important. (More than once I have found a check inside an envelope that I thought was junk mail.) If you use coupons, try to stay on top of them and use them or toss when they expire.
I have "excess" tendencies myself and I find paperwork to be one of the hardest things to manage, so be kind to yourself while you get this sorted out. Don't beat yourself up in other words. And honestly, there are very few people who are always on top of it.
I purchased a file cabinet at the Thrift Store. I can file all my papers, taxes, receipts, and owners manuals, also box of photos, takes a lot less room than boxes and I can easily find what I need. You could put it in a storage room or back bedroom in closet.
Personally I don't know why anyone unless for business purposes, would find a need to keep credit card statements, past utility bills or old insurance statements. I keep only the most current ones and shred and trash the rest. I've been doing this for years now and, as of yet not found a need for any of them. If I ever do I can go online and print out a copy. I don't even keep appliance manuals. Most can be downloaded from the internet if I ever need one. I keep receits of large purchases. I have scanned a lot of paper documents on a thumb drive and keep originals in a safe deposit box.
I am trying to re-organize my home - sort of downsizing everything, including paperwork. I need to know what I need to save, how long I should save it, and how to save it. I know about tax info. I'm talking about receipts, instructions, Medicare stuff, medical stuff, etc. Just about everything I've been holding on to that takes up 4 file drawers. I grew up with "save everything for 10 years" - canceled checks, bank statements, merchandise receipts for big items, etc. I just need to know how long and what do I keep. I really want to get a handle on our paperwork so that if someone asks "Where's this?" I can pull it with ease.
Diane McIntyre from Lewiston, ID
Editors Note: Here is another helpful ThiftyFun article: Should It Stay or Should It go?
Many of the ideas shared here are great; however, keeping things for 4+ months is really difficult for me due to lack of room. I've tried the breakdown Cindy S. describes and it works great but my husband's medical stuff fills a full file cabinet drawer! I have oodles of hanging folders - 4 drawers of a standard file cabinet full and each folder is full plus I have 4 storage tubs full of paperwork for only the past 7-10 years. I don't know what to pitch, what to keep, how long I need to keep it, etc. I am searching all over the Internet for ideas but am finding there are organizations that charge hefty fees to help you organize. There has got to be free information out there somewhere.
i have seen on various websites that you should just scan all your papers and keep the files on your computer or a flash drive. it will definitely help out having papers since I'm living in a small space but it's not very safe, is it?
I read Getting Things Done a few years ago, and I recently wrote a (very long) post on how I adapted a small part of David Allen's approach to get some kind of control over my household paperwork. I was convinced when I started that I'd need about four filing cabinets, but the secret is not to put your 'current' stuff and your 'archive' stuff together. That way you can have the things you need daily where you can access them easily, and the archive in a back room or on a high shelf where you don't have to worry about it because you only need to get to it once in a while. (And you'll probably end up with less of both than you imagined - check out the photo for my day-to-day filing box which holds 1-2 years worth of filing at a time.)
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Carol from Strongsville, Ohio
I am not an organized person, but am learning to become one. The free web site that I love is flylady.net and she is teaching me daily how to do little "babysteps" to eventually be organized. Check it out! (09/09/2006)
I use binders for organizing my papers. For school papers, I use a 3 hole punch so the papers stay in. Then when I don't need the paper, I can just rip it out. For other papers, I use sheet protectors which I found at a great deal. I have a big binder for 'mail', where I put things that I want to go through again later. I have one for recipes, etc. I can't organize in files, I need to see what everything is and go through quickly so using sheet protectors are a godsend to me. (09/09/2006)
Hello fellow northeast ohioan! I am in Lorain. My system is fairly simple. I have one file drawer (it came in my desk) and several hanging files. They are marked as follows :
That's it! When I pay a bill I mark it with the amount paid, the check number, the date and then I paperclip it to the last one. All gas bills together, all electric bills together etc. Then every once in awhile I shred the old ones but I always keep at least 4 months of utilities and some other things longer. I have a small fire safe in my closet that I keep the deed to my house in, our social security cards, birth certificates, etc in for safety. I keep track of my monthly budget and expenses in a regular school notebook. This system has served me well for almost 20 years. Good Luck!
By Cindy S.
My system is very similar to Cindy S', except I also have a hanging folder for taxes, and I mark all bill due dates, work hours, and any extra money I earn outside my regular job on my wall calendar so I don't forget them. At the end of the year, I use the calendar to do my taxes and then keep it with my tax papers for that year. It's been very helpful to me to have all that info in one place. (09/10/2006)
There is a cool book called "Getting Things Done" which addresses this in detail. We have applied it, and we have no more "piles"! it's easy to do and even a little bit fun.