How to Know What Paperwork to Keep

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If you don't know which paperwork you should be keeping, chances are you're keeping far too much. Knowing which paperwork to keep and for how long will help you get your paperwork organized in such a way that the most important documents are safely stored and easily accessible. One or two file cabinets, a fireproof safe and a paper shredder will come in handy.

Things You'll Need

  • Fireproof safe
  • Shredder
  • File cabinet
  • Keep supporting documentation for tax returns for seven years, but keep the returns themselves indefinitely, as Liz Pulliam Weston of MSN Money recommends. Supporting documentation would include receipts and statements for anything you claimed as a deduction on your return for that year.

  • Keep bank statements and credit card bills only as long as you need them. Credit card statements serve no purpose once the bill is paid, so shred it and recycle it. Unless you're involved in a legal battle where they may be necessary, your bank statements can be thrown out as soon as the new statement arrives.

  • Shred insurance policies as soon as the new ones arrive. If you have old policies lying around, those too can be shredded. Contact your insurance provider to find out the period of limitations for filing a claim and keep supporting documentation relating to a claim for that amount of time.

  • Keep the annual reports from investment companies and brokerages, but shred the quarterly reports.

  • File your pay stubs only for the year for which you need to pay taxes, but then get rid of them.

  • Keep receipts that serve as supporting documentation for a tax return and receipts for major home appliance and furniture purchases, along with the manuals. The receipts for appliances are especially important if you'll need them in order to use the warranty.

  • File the following types of documents in a fireproof safe: the deed to your house, marriage license, divorce decree, pension plan documents, estate-planning documents--such as your will or trust documents--and the inventory of any safe-deposit boxes. But, as Weston reminds us, all these documents, even the most important--can be reproduced, so don't panic if you accidentally shred one very important one.

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References

  • Photo Credit Jupiterimages/Polka Dot/Getty Images
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