Thursday, January 30, 2014

A Functional Filing System: Part 2 of 2

Congratulations to Erin Lundell on winning our Budget Boot Camp Giveaway! Watch your email this week for an email containing a link to your $25 Amazon gift card. Thanks to everyone for participating!

In Part 1 of the Functional Filing System series, we talked about how to set up a physical filing system and inbox. In Part 2, we'll talk about what to keep for how long..

First, so that your files (especially your physical one) don't bulge beyond their bounds, you need to purge them occasionally and get rid of the stuff you don't need to keep anymore. Here's what you need to keep and for how long. You may need to adapt for your personal situation.


1. Gather up your super important paper files. These are the ones that I would want to have if everything else was destroyed (like if there was a fire in our apartment). I keep them organized in manilla folders in a small fireproof/waterproof safe. I like that they are all together so I could grab them quickly if I needed. Since they're all together, make sure you store them in an accessible, but not easily visible place. For me, these files include
  • Income Tax Returns. I keep one file for each year with the actual Federal and state returns (if I paper filed), as well as supporting documentation such as W-2s, or any other official tax forms, and records supporting any deductions, like charitable contributions. I'd keep the suipporting documentation for at least six years. Personally, I'd keep the actual returns forever (feel free to scan and save to a secure place to free up space).
  • Birth certificates, marriage certificate, passports, social security cards, copies of drivers licenses, etc.
  • Car records. Anything you want to hang on to until you sell the car-- the title, car loan paperwork, logs of maintenance, etc.
  • House records (if I had a house). Anything you want to hang on to until you sell the house-- mortgage/ownership paperwork, records of improvements, etc.
  • Important legal contracts (if I had any, and I wanted to keep the originals)
  • Business records (doesn't apply to me-- but check this out guideline #2 here for more information)
2. Sign up to go paperless where you can. Sign up for online statements from your bank statements, credit card companies, and utility records. Shred any paper copies you've been hanging onto after three years.

3. Scan what you can and shred the paper copies. I'm all about de-cluttering and getting rid of paper where I can. Here are some examples of things I shred and save online (check out this article for how to encrypt sensitive files). 
  • The actual tax return
  • Insurance policies (if I have a copy, not the original)
  • Investment records
  • Paystubs
  • Medical bills I paid (note the date and method of payment). I once got a bill for over $1,000 for an expense I had already paid about half a year after the fact because the employee never noted my payment in the system. It was super helpful to know which day I had made the payment so I could send them the documentation and get the matter straightened out.
  • Anything that can be scanned and tossed I scan. This includes old schoolwork, random newspaper articles, artwork from when I was 7...
4. Go through the rest of the papers. Feel free to keep what you really want to keep, but toss the rest!

Tell us-- How do you keep your files under control?








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