Do you know that spring cleaning and decluttering are actually good for you? According to goodnet.com, cleaning out and organizing your home and office can make you happier and more productive. Some might disagree, but I think we all can admit that less clutter leads to less stress.
Look around your daily living and working space. Do you see piles of papers and
documents? People often wonder what financial records need to be saved and how long to save them. Bankrate.com has the following guidelines:
1. Tax Returns - save for 7 years
2. IRA Contribution records - keep permanently
3. Retirement/investment plan statements - keep annual summaries until you retire or close the account
4. Bank records - keep copies of checks related to your taxes, business expenses and home improvements
5. Brokerage statements - keep until you sell the stocks
6. Bills - shred the bill after payment clears
7. Credit card receipts and statements - keep receipts until you confirm they match the statement and then shred; keep for seven years if the expense is tax-related
8. Paycheck stubs - compare to annual W-2 and then shred
9. House records - keep records detailing purchase price, improvements, buying and selling expenses
In addition, it’s a good idea to keep copies of insurance policies until the new policies are received. Keep loan documents until the loan is paid off and keep your car’s title until you sell the car. You should also keep the following permanently: birth and death certificates, marriage licenses, divorce papers, and Social Security cards.
There are many ways to store financial records safely. Use a fireproof safe or a password-protected electronic file for important documents including current estate planning and tax documents. You might want to store original documents in a bank’s safe deposit box such as birth and death certificates, marriage certificates, Social Security cards, passports, and life insurance policies.
How can you stop unnecessary papers from accumulating in the future? The best advice is to sort mail as soon as it arrives. Throw away junk mail. Shred all documents containing personal information. Separate bills and keep them all in one place such as a basket or tray. File away any documents that you need to keep. You may also register with DMAChoice.org or DirectMail.com’s national Do Not Mail List. This will help remove your name from unwanted mailing lists and cut down on junk mail. The benefits of cleaning out your accumulated paperwork are many. Your financial records will be organized for you and your loved ones. Your home and office will be less cluttered. Your life will be less stressful. You will have simplified your life!
Beth Carroll is a CPA and a Professional Daily Money Manager. Her company, Cornerstone Money Management, LLC, helps seniors in their homes with billpay, financial organization and cash flow management. You may reach her at firstname.lastname@example.org or 401-323-4895.