Do you have heaps of financial papers in your house? Bills, receipts, credit card statements, tax records and investment files may have piled-up last year. Now is the best time to start arranging your records with these easy and useful organizing tips.
Throw away the unnecessary. Before doing anything else, you must know how to segregate your papers. Commonly, you can divide them into three. One is for records you need for less than one year, another for papers up to 5 years and then last is for documents you will need to hold on to indefinitely. For example, do you really need to keep your ATM withdrawal slips or your credit card receipts? It would be good practice to keep a record of these things and when it is validated by your monthly statement, you can already shred and throw them away. After a year or so, you can already toss out your credit card statements and utility bills (unless needed for business).
Keep what you need. There are however some papers that you need to keep for more than one year but less than 5 years such as tax records. You should also keep canceled checks and payment records for mortgage, insurance and other loans.
Set a place for your papers. More often than not, the reason why people get overwhelmed by papers is because they don’t have a place to put them in. You should have a designated area where you immediately put the paper after you have received it. It can be a folder, drawer or a cabinet. Preferably, the area where you intend to keep your papers is located near a table or desk so that you have a place to maintain your records and consolidate your statements. Also, keep your birth and marriage certificates, insurance policies, property deeds, and other important records in a secure but accessible place so you and your family will always be able to get to them easily if the need arises.
Have a system. When organizing a file system, you want to keep it as simple as possible. You can divide your papers into categories. For example, you can segregate the papers as either tax-related or non-tax related, or by account type (credit-card statements, mortgage statements, bills, etc.) or by expense (deductible business expenses, contributions to charity, and so on) or by financial goal (housing, retirement, college fund, etc.) or even by the facets of your life. This may require more time at first, but in due course, it will save you time.
Deal with the backlog. Once you have a system figured out, you can now tackle the piles that you have accrued. You shouldn’t take on this job all at once. Instead, do small amounts at a time. You can set aside 30 minutes a day sorting old papers while watching television or listening to the radio. A little organization goes a long way. It will not just save you time and money but it will also give you peace of mind.