Somewhere between sentimental and hoarding, lots of us have papers wasting away in our file cabinets, random folders, books, or my personal favorite shoeboxes! If you are anything like me it has been going strong that way for years. So now you have piles of roach feed called financial documents building up and you are wondering what the heck do I need to keep and what needs to go? I thought I would make it a little simpler for you with this information.
What financial documents to keep:
Some things just need to be around forever and you should keep them in a safe place. This being your birth certificate, social security card, real estate deeds, titles, military records, passport/ citizenship papers, and your immunization and health records. You don’t want to be me and lose your title and pay that $98.00 title duplication fee to the Illinois Department of Revenue when you decide to sell your car.
Tax returns are also something you want to keep but keep a date on. You only need them for seven years after you have filed taxes. This is because the IRS can extend your tax returns six years if there is a problem somewhere. And just to be on the safe side I would still keep my actual tax returns the IRS has no limit on when it can audit you.
What financial documents to toss:
So you know that endless pile of receipts and bills? Toss them! No need to keep receipts of your ATM transactions, which most of us have easy access to these days thanks to online banking. But after actively checking your statements to verify what is on your receipts are there amongst the validity of other purchases dispose of the receipts. When you see the bills have been cleared in your statement, there is no need to keep the old bills around either. For large purchases like furniture, cars, jewelry, you may want to hold on to them for references until you warranty expires. I even keep my flat iron receipts. If the warranty on this thing is 4-years, you better believe I am getting my money’s worth.
Pay stubs! Now of this I am so guilty, I have every paper pay stub from every job I’ve ever worked since I was sixteen! The reality is you only need at best the most recent two in order to verify employment for things like when you are trying to rent an apartment. Your income is coming back to you in your w-2s at the end of the year, but I understand if some are a little more anal about their pay stubs to verify the right amounts all add up. I wouldn’t deem it necessary to collect more than a year’s worth of pay stubs though after verifying the correct information on your w-2.
Where to dispose of your things:
Now unless you are know some chemical ways to destroy your documents at home, I suggest you keep a shredder for your old documents. Simply throwing them in the trash could make you susceptible to identity theft from trash-diggers. I suggest you drop your documents through your job’s office shredder, if they have one. Banks and credit unions shred things for their clients all the time. You can hand your bank teller an old bag worth of things and save yourself the hassle.
After shredding your documents:
Be prepared to breathe easier with all of that extra room in your closets and cabinets.