If you’ve started spring cleaning a little early this year, it might be time to visit the pile of papers you have stacked up in your car, kitchen or dresser. In a world of electronics, it’s surprising how much paper we actually accumulate over the year and the harm that can be done if important papers get lost or stolen. To make sure you are able to find what you need, when you need it, organize your documents into two piles: active storage and forever storage.
Active storage refers to documents you might need to reference from time to time. These can include appliance manuals or proof of income. Store these items in a safe place but one that is easily accessible:
What to keep short-term:
¨ Tax Records and Receipts (7 years)
¨ Pay Stubs (1 year)
¨ Bank Statements (1 year)
¨ Home Purchase, Sale, Improvement Documents (6 years)
¨ Medical Records and Bills (1 year after payment)
¨ Warranty Documents and Appliance Manuals (as long as you own it)
Forever storage consists of documents that you will need throughout your life. Not only are these items identity-sensitive but can also be hard to replace. Store these documents in a secured place like a safety deposit box at your local bank:
What to keep long-term/forever:
¨ Birth Certificates
¨ Death Certificates
¨ Social Security Cards
¨ Pension Plan Documents
¨ ID Cards and Passports
¨ Marriage License
¨ Business License
¨ Insurance Policies
¨ Vehicle Titles
¨ Loan Documents
¨ House Deeds
¨ Mortgage Documents
But you don’t need to keep every scrap of paper.
Things OK to toss:
¨ Receipts for Nondeductible Expenses
¨ Expired Warranties
¨ Cancelled Checks for Cash
¨ Pay Stubs, after verifying your W2
When throwing out papers with important information on them, including receipts, you should do so appropriately by shredding them. Although receipts no longer display your entire credit card number, the last four digits and expiration date can be fuel if landed in the wrong hands. Invest in a home shredder or look up a shredding service or event in your area.
Shredding documents can prevent identity theft which is a growing crime that can cost you time and money if someone uses your identity to commit fraud. In order to detect identity theft make sure you’re checking your credit report annually, review financial statement monthly and be alert to irregular bill activity. If you suspect you’ve been a victim of identity theft, report it immediately by contacting the Federal Trade Commission, your local BBB, and financial institutions.