Monday, October 5, 2009

Do I Really Need to Keep It?

Put Paper in Its Place, Part 1 (of 5)

Most articles I’ve read about putting paper in its place start with storing your most important documents (whatever they may be) in a safety deposit or fireproof box. I’m going to start at the opposite end of the spectrum. Let’s take a look at the plethora of papers that come into your house daily.

The first thing you need to do is to sort your mail standing over a trashcan. That way, all the junk mail and fliers for stuff in which you are not interested doesn’t even get set on a counter. Then, take the rest of the mail and put your bills in a to-be-paid file, tray, or slot on your desk. Put invitations, surveys, and anything else that requires a response in a to-do file or bin. Post other necessary information near your family calendar. (What? You don’t have a family calendar? Hhmmm, maybe I’ll make my next article about that.)

Take a similar approach with papers your kids bring home from outside classes (or school), sports, church, or party and event invitations. If you need to fill out papers, put them in your to-do file. Make a note on your family calendar of important dates. Read the other information, then toss the papers or file them (temporarily) in the appropriate folder or binder section. Important note: flip through your to-do file daily.

Before we can get to organizing files or binders, you need to take some time to clean out the dead wood that you’ve already got cluttering up your desk, floor, and filing cabinet. Get a large trash bag and make sure your shredder is plugged in. If you have any old invitations, fliers, newspapers, magazines, or letters, throw them away. If you cancelled checks, keep ONLY those you need for tax purposes (more on that shortly) and shred the rest. If you have any banking records from more than seven years ago, shred them. Seriously. Shred the deed to the clunker car you bought when you were sixteen. Please. Shred ALL of the utility bills that are more than a year old.

Now that you’ve cleaned out all the unnecessary papers, look at how much room you have to organize the papers you really do need to keep! In my research, I found that the general rule of thumb is to keep financial papers pertaining to taxes and investments for seven years. Period. It is suggested, though, that you keep a copy of your tax returns (but not all the other papers) permanently. Since I’m not an accountant, I will add this disclaimer and tell you to check with yours to make sure that you’re keeping the right papers for the right length of time.

So, what about bank statements, utility bills, and the fifty-zillion receipts littering the top of your desk right now? Bank statements should be saved for no longer than a year, so as you put this month’s statements in your file, throw out any statements that are from last October or earlier. It’s a good idea to save utility bills for several months for proof of residency or other issues, but it’s unnecessary to save them for longer than that unless you use them as tax deductions for a home business. Again, ask your accountant for his recommendations. Make a file for each utility bill, and as you put the new ones in each month, throw out ones that are older than three months or a year or whatever your accountant suggests. Receipts only need to be saved if they are tax deductible (in their own file), for a warranty (staple it to the warranty and file it with the owner’s manual), or for something that may need to be returned (clothes or tools, for instance, but weed these out regularly). The rest should be entered into your computer budgeting program weekly and then thrown out. I promise it won’t hurt!

Personal papers that need to be kept permanently (birth, death, and marriage certificates, citizenship and naturalization papers, separation and divorce papers, military records, social security cards, etc.) should be kept in a safety deposit box or in a fireproof box. Only a limited number of other items should be kept on a long-term basis and updated regularly. These include medical histories, employment, insurance, real estate and tax return records, insurance policies, and things like advance directives. These papers should be kept in a fireproof box in your home so you can readily update them and have access to them. Some papers need to be kept in a safe place only for as long as they are in effect: wills, car deeds, records of car repairs and service, passports, and owner’s manuals. If you keep these things in a filing cabinet, make one file for each type of record. Label it clearly and file it in alphabetical order.

I could say so much more about putting paper in its place, but I don’t want to overwhelm you. Besides, until I started writing this post, I didn’t realize how much information was out there. In fact, there is so much more information to cover that I am going to write four more articles in this series—one every week for the month of October. Whatever you do, do NOT print this article out—you’ll just create more papers for which you would have to find a place!

** This article first appeared on the Lesson Pathways blog last Friday in honor of National Get Organized Week. **