Which Records Should Be Kept?

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Personal record-keeping may require a lot of space.
Personal record-keeping may require a lot of space. (Image: Jupiterimages/BananaStock/Getty Images)

While some people keep nearly any record, receipt or statement, others prefer to throw everything away. The decision to keep or discard a particular item or record should be considered carefully to determine the best choice. Some items such as tax returns, warranties or receipts may prove invaluable at some point, while other items such as monthly bank statements or utility bills may serve no practical purpose.

Tax Returns

Access to historical tax returns can prove to be an invaluable resource in the event of an audit or other legal situation. While obtaining a copy of the return itself may be simple, support documentation, receipts, and other information may no longer be available. Based on IRS guidelines and regulations, keeping historical tax returns for a period of seven years is commonly suggested.

Monthly Statements

Bank, credit card or other monthly statements should be kept for a few months as reference. Statements used for taxes or business purposes should be kept until year's end. In an effort to reduce paper usage and cost, many financial institutions offer online access to certain time periods of monthly statement history. This may eliminate keeping paper copies on-hand.

Insurance Policy

Insurance policies should be kept until they expire as reference and backup. Having an original policy in hand may be helpful when filing a claim or in the event the insurer is sold or merged with another carrier. In some of these cases, policy documentation can be misplaced, hard to locate or even lost.

Home Records

Records relating to home improvements, repairs or remodeling should be maintained for reference when filing insurance claims or for resell purposes. These records can also become important for tax purposes.

Receipts

Receipts for major purposes or anything with a warranty should be maintained for as long as you own the item. Receipts should be attached to support documentation such as extended service plans, insurance policies or warranty certificates.

Legal Documents

Any legal document should be kept for as long as it is valid. For example, documents such as court filings, child support orders, divorce records, lawsuit documentation, fine payments, bankruptcy filings and wills should be kept for as long as possible. Documents with an expiration date, such as trusts or contracts, can be discarded after expiration.

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