The Paperwork Reset: What To Keep, File, Scan, or Toss
When you think of organizing, what comes to mind first? Your house, most likely; you want to keep rooms clutter free and avoid closets stuffed to the brim. You might think of routines and family outings, or classrooms and offices. One of the oft neglected bits of organizing, however, is paperwork. Paperwork easily accumulates, and it can be difficult (or straight up boring) to sift through. It is, however, one of the easiest things to hoard and the easiest to get rid of, if you know what to look for. Understanding what paperwork needs to be kept, what you should file away or scan, and what you can simply get rid of will set you up on the path to paperwork success (and hopefully save you some time and space in the future).
What to Keep and How to Store It
You’ve probably heard this old rule of thumb: keep your tax returns (and related documentation) going back at least seven years* (longer if you own a business). In general, this is a good rule to abide by, but your tax returns aren’t the only thing you should keep. Along with tax papers, keep any other legal records, identity documents, and insurance information. This type of information includes things like your birth certificate, possible name change documentation, wills, and similar types of documents.
It’s also important to keep documentation of assets, such as the deed to a house or a copy of a car’s registration. How you store these will depend on the type of document, how often you need to access it, and where in the house you want to keep it. Documents such as financial or assets that you typically need for your records and don’t foresee needing access to quickly or consistently can be stored in a filing cabinet, folder, or binder. If you plan on storing them in an attic or basement, invest in a plastic container you can clearly label and store them in. This will help prevent mold and deterioration.
Identity documents are typically accessed more often and should be kept in a lockbox where you can easily access it. Other documents you might want to keep on hand include medical records, health insurance, and other medical documentation and information. Depending on your circumstances, you might store all these in a clearly labeled folder or binder, or you might have a desk drawer dedicated to them. Wherever you decide to store your documents, ensure that they’re easily accessible so you can find them when you need them.
What To Digitize
As more systems become dependent on technology, more documentation needs to be digitized (or will be provided in a digital format in the first place). It’s important to keep digital documents secure and organized so you can access them when needed. Likewise, having digital copies of physical documents can make it easier to share those documents if needed, and leave you with a backup should anything happen to the original copy. Your taxes are one of the most important documents to digitize if they weren’t provided to you that way. Insurance information and asset documentation should also be digitized. All this information should be housed in a clearly labeled folder on your desktop for easy access.
Other documents you can digitize include information you want to reference but don’t need to provide a physical copy of. You might find you want to keep copies of your or your children’s past medical tests and records, copies of old bank statements, or even educational records. These are documents you might not want to house physically, but could be useful to reference. Keeping a digital copy ensures you have that information and don’t have to deal with the clutter of physical documents.
What to Toss
In general, you can throw out documentation that is out of date; typically, anything ten years or older can be shredded or recycled. If it has any of your personal information, including medical, bank, or identity info, shred it. Everything else can be recycled. Information that is no longer applicable, such as insurance records for a car you no longer own, can also be recycled. Finally, you can typically toss what people find the hardest to part with: nostalgic documentation. This typically includes old homework assignments and report cards, junk mail, receipts, and even old bills and statements. It can feel important to keep these on hand, but think about the last time you looked at them: was it a year ago? Two years ago? Ten years ago? Knowing when to let something go will help you make judgement calls in the future about what to keep and help you on the path towards organized and responsible filing.
Organizing paperwork isn’t necessarily the most exciting task, but it’s an incredibly important one. Keeping track of your files and having them organized in a way that makes sense to you will not only prevent chaos and clutter but ensure that you are prepared for the future.
*Always consult with your accountant or tax rep before making decisions to destroy these files.