This summer my husband and I drove 700 miles with our two dogs to my in-laws’ house in eastern Long Island. Once we arrived, we continued this test of marriage by spending three days cleaning out their musty basement that they no longer use.
Over time, we all seem to accumulate unwanted clothes and household goods, particularly if we have space, and nooks and crannies we can shove these things into; we close a door and pretend they’re no longer there. Because well, one day, maybe, we’ll want something in that pile again, right? Although there are days my husband probably thinks he lives with a professional organizer, I’m not about to provide you with tips for organizing your physical things. Rather, I’d like to help free you, like my mother-in-law, of the 10, 20, maybe 50 years’ worth of paper you may be accumulating in your house.
You see, before we could even get to the household goods, we waded through nine huge trash bags full of old bills, tax records, and bank statements…one painstaking piece of paper at a time. We, like you, wanted to make sure we were not discarding anything important that might be in the middle of just one of those stacks. This was my mother-in-law’s filing system for decades: unsure what to keep or throw away, she kept everything! And if asked, “Do you have a copy of that bank statement?” she could always answer honestly, “Yes, and good luck finding it!” (but in her own version of broken-Italian-English).
Below is a chart to help you organize your files. We think each year, just after you file your taxes, is the perfect time to refresh your files and purge what is no longer needed:
|Document||How long to Keep|
|Investment Performance Reports||Discard once you receive the next one|
|Utility Bills||Discard once you receive the next one|
|Medical Bills||Discard once you’ve paid UNLESS you’re deducting medical expenses on your tax return. If you’re deducting expenses then keep for 3 years with your tax records.|
|ATM Printouts||Discard as soon as you balance your checkbook or at the end of the month|
|Credit Card Statements||Keep until you confirm the charges and have proof of payment|
|Receipts||For anything you deduct on your tax return, keep for 3 years with your tax records. All others can be thrown away after you’ve consumed the item, it is no longer returnable, or the warranty has expired.|
|Bank Statements||One year (or until you’ve completed the tax return for that year)|
|Investment Tax Statements||One year (or until you’ve completed the tax return for that year)|
|Pay Stubs||One year, until you receive your final W-2 for the year and have reconciled it|
|Tax Returns and Supporting Documents||Three years from the date you paid the tax. You can be audited by the IRS for up to seven years.|
|Records Showing Improvements to Real Property (your home)||Keep until the house is sold. Records can be used when selling your home to offset capital gains after the sale.|
|Insurance Documents, Property Records/Deeds/Titles, or Stock Certificates||Keep while these items are active. Once the contracts are completed or expired, they can be discarded.|
|Documentation of Major Loans (home, student, cars, home equity line, etc.)||Keep payoff statements forever. Keep along with promissory notes and related documents in safe deposit box or fire proof safe.|
|Marriage License, Birth Certificate, Wills, Adoption Papers, Death Certificate, Divorce Decree, Records of Paid Mortgages||KEEP FOREVER. These should be kept in a very safe place like a safe deposit box or fire proof safe|
Most bills and statements today can be pulled up online so there’s no need to keep them once they’ve been paid or reviewed. If you’re not comfortable relying on virtual documents, keep them one month, when the next bill comes in, throw out the last month. If you insist on keeping a more complete record, simply keep the last annual bill for your records.
Organization, like eating healthy or staying fit, is not a one-time thing. In order for it to stick, it must become a way of thinking. I hope that with these tips, the next time you receive a bank statement or bill in the mail, you will think twice about adding it to an ever growing pile of paper to be filed and instead give some thought to tossing it in the pile of paper to be shredded.
If it makes you feel just a little better, after going through all those bags of paper at my mother-in-law’s house, we did find a few gems— including my grandmother-in-law’s and mother-in-law’s immigration certificates from 1963!—and one very important document: my grandmother-in-law’s will which no one living knew existed.