q + a: what papers to keep

tax
 
Angie asks: “My biggest problem is paper! Articles, notebooks from university years, bank paperwork, deposit slips, statements, old magazines… Sitting yesterday reading the stuff and thinking ‘I may need this’, realizing that I am not decluttering anything. I tried to detach myself from all this paper, it’s stuff after all. Your advice is very much appreciated, thank you Laura!”
 
PLAN
Think if there’s anything you’re ok to get rid of right away. Since you have a hard time letting go, start with the least emotional decision; bank paperwork, deposit slips etc. (see below). The feeling of having to get rid of things sometimes make people hold on more, so tell yourself it’s ok to keep some things.
 
QUICK EDIT + SORT
Create labels using post-it notes, index cards or even painters tape on the floor or along a wall for categories you know you have: recycle, shred, tax papers, legal documents, college, memorabilia, article to read, etc, Grab a pile and start sorting things into their respective categories. The idea is to get papers sorted quickly and get the papers you know you’re not keeping out of the way. This is not the time to read and think; just sort into manageable piles.
 
If you have a room or area in your home where you can leave everything half-sorted end of the day that would be great (most people cannot get this done in one sitting). If not, use labeled shopping bags, folders or boxes to keep piles together until you’re ready to get back to it.
 
DEEP EDIT
Once the papers are sorted, do a more thorough edit one category at a time, starting with the smallest pile and/or the easiest to go thru. Deep reading at this point will get nothing done. Skim the page to see if the article, notebook, etc has any relevance at this point in your life:
 
Articles
There’s an infinite amount of information out there. Chances are the articles you’ve been saving for years are outdated or maybe the reason you haven’t read them is that you actually don’t need to. Magazines run the basic same articles over and over again so chances are there’s nothing amazing you’ve been keeping that hasn’t been or will be repeated again.
 
Statements/Bills/Tax Papers
If you write it off on your taxes, keep them. Ask your CPA (or who over does your taxes) for a list of what you need to keep. See above image for more details. If you’re not writing them off, there’s really no reason to keep them.
 
If you need them, the question is have you done your taxes? If you don’t actually need them to file, sort them by year. Don’t bother sorting them any further since odds are you’ll probably not have to reference them again.
 
Other
Keep insurance policies, legal documents (as mentioned above). As far as your notebooks from college, be realistic. How long has it been since you’ve graduated and have you ever looked back at them? For some professions, it’s fine to keep some things from college, but certainly not all.
 
DISCLAIMER: I am a residential organizer, not commercial, the following info is for individuals only, also I am not a qualified financial advisor, attorney or CPA. If you have any further questions about what you should keep consult your qualified financial advisor, attorney and/or CPA.
 

do you have a paper shredder

It’s a no brainer to have a shredder. Anything with your name, address, and/or account info (bank, cc, etc) should be shredded for your personal safety. Do what you can to eliminate junk mail, but the little you get should be shredded. 

what you need to know when buying a shredder:
  • get a cross-cut/confetti
  • get one that shreds disks and cc if you need it
  • expect to spend $50-$95 for basic household, if you’re shredding a lot, spend more
  • don’t overload it; if it says 5 sheets at a time, do 4 sheets
  • many models can only do 5-10 minutes of shredding at a time
I keep mine unplugged under the kitchen sink, putting paper in the basket it came with and when it gets full shred things all at once. If you have a ton of shredding to do, go to a private shredding company who can come to you for a fee, or bring them what you need shredded. Google your city and ‘shredding service’ to find someone near you.
 

how to get your paperwork in order: step 1 + 2

One of the main reasons I started this blog is because I’m tired of all the ‘one-size fits all’ solutions out there for organizing, decorating, dressing… Solutions should be based on a person’s needs, budget, space, habits, and/or the amount of things in questions. By taking the following steps, I’m hoping you’ll find your perfect solution to handle your paperwork:
 
1. STOP UNWANTED PAPER FROM COMING IN THE DOOR
2. EDIT
3. SORT INTO CURRENT, REFERENCE, ARCHIVE
4. CREATE FILING SYSTEM
5. MAINTAIN
 
Step #1. Stop The Unwanted From Coming In The Door
I already talked about this step, so onto step 2…
 
Step #2. Edit
Simply stated, you need to keep anything related to taxes, insurance, and legal matters. The IRS has 6 years to question you about returns if they suspect underreported income but in cases of fraud, there is no time limitation. Therefore, it’s recommended you keep tax records at least 7 years.
 
Keep all uncomplicated Tax Returns for 7 years including all supporting documents; w-2’s, 1099’s, cancelled checks, bank deposit slips, bank statements, charitable contribution documentation, credit card statements, receipts, dairies and logs.
Keep retirement plan annual reports, IRA annual reports, IRA non-deductable contributions (form 8606), marriage and/or divorce documents, estate planning documents, adoption, birth and death certificates, and wills permanently.
 
The following paperwork should be kept for the ownership period + 7 years; investment purchases and sales slips, dividend reinvestment records, year-end brokerage statements, mutual fund annual statements, investment property purchase documents, home purchase documents, home improvement receipts and cancelled checks, home repair receipts and cancelled checks.
 
Loan paperwork should be kept for the term of the loan plus 7 years. Ask your insurance agent for how long you should keep any insurance policies after the life of the policy.
 
DISCLAIMER: I am a residential organizer, not commercial so the following info is for individuals only, also I am not a qualified financial advisor, attorney or CPA. If you have any further questions about what you should keep consult your qualified financial advisor, attorney and/or CPA.

how to get your paperwork in order step 3: sorting

Step #3. Sort Into Current, Reference, Archive

Here are some examples of what falls into each category and a few more reasons to keep/toss…

1. CURRENT – papers accessed often

  • MONTHLY HOUSEHOLD BILLS: unless you’re writing things off, only keep the past month or get online/paperless bills (go to their website to register for this) so you can check your previous payment has been applied properly and there are no other mistakes.
  • RECEIPTS: keep debit and credit card receipts to check against statements; recent purchases in case you want to return; for warranty purposes; anything for tax and/or insurance purposes.
  • MONTHLY BANK AND CREDIT CARD STATEMENTS: check against your receipts for mistakes and/or fraudulent charges, then shred any receipts you don’t need to keep and either file away the statements (if needed for tax purposes) or shred accordingly. Get online/paperless statements especially if you don’t need to keep for tax purposes.
 
2. REFERENCE– papers accessed somewhat often
  • INSPIRATION: home, travel, fashion…
  • ARTICLES TO READ
  • MANUALS: make sure you only keeping manuals for things you actually have.
  • LEGAL: passports, social security card, titles, ect
 
3. ARCHIVE– papers that need to be kept but not accessed often, or at all
  • PAST YEARS TAXES: some use the previous year’s taxes but the rest can be boxed and put away.
  • LEGAL: anything that’s settled and most likely not needed to be accessed.

how to get your paperwork in order step 4: create filing system

Step #4. Create Filing System

 As with your other belongings, giving your paperwork a proper, accessible, and convenient home is key to keeping it organized. Whatever you choose, label your files in a clear, logical way, grouping like things together (all household utilities, investment statements, etc) so you can easily find and retrieve things.
 
Storage Options:
  • SCANNERS/ELECTRONIC STORAGE: use a receipt scanner, or an all-in-one copy/printer/scanner to scan receipts and misc bills. Go paperless where you can, but organize your computer files as you would actual paper, using clearly labeled folders in the same area for easy retrieval.
  • FILING CABINET: if you absolutely need one, keep it accessible, even if it’s in a closet. Use for current and reference papers, not archival papers.
  • PORTABLE FILING BOX: less expensive and more adaptable storage than a filing cabinet. They fit anywhere and can go where you go when paying your bills. This cascading one is great and this style is my personal favorite.
  • BANKERS BOX: For your archival papers, bankers boxes and manilla envelopes are all you need. Pull file contents only and put into (properly labeled) envelope, so you don’t have to make all new folders each year. Store all boxes together on a top shelf or back of a closet.
 

how to get your paperwork in order step 4: continued

Step #4. Create Filing System (continued)

For misc papers such as invitations, flyers, coupons, etc, that you don’t want in a file folder, here are some options of where to keep them for easy access:
  • ENTRY: You should have a proper entry no matter the size of your space. I’ve created one in my current 325 sqft studio with a simple bowl on a table to keep my wallet, keys, store credits, coupons, and invitations; basically anything you need to grab as you run out the door. You could do something similar in your bedroom with a bowl or tray on a dresser or a shelf in the closet.
  • ELECTRONIC/PAPER ORGANIZER: As for invites and appt reminders, use your planner, whether electronic (blackberry, iphone) or a paper planner (like me), and toss/recycle any paper backup. Take a moment at the beginning of the week to review what’s coming up, and then in the morning each day. If it seems you are missing appts and need constant reminding, you should rethink what kind of planner you are using and/or how your’re using it.
  • BULLETIN/MAGNETIC BOARD: If you don’t like the idea of having a bulletin or magnetic board out, put one on the inside door of your clothes or coat closet, or the inside of a kitchen cabinet. A great place to keep these misc papers, extra keys, and inspirational quotes. Just make sure you clear things off regularly so it doesn’t get too cluttered.

how to get your paperwork in order step 5: maintenance

Step #5. MAINTENANCE

Listen, as adults there are certain things we have to do whether we want to or not, like cleaning and keeping track of our paperwork (unless we hire someone else to do it). Here are a few tips to make it as easy as possible:
  • Take time to create a system that works best for you. If it isn’t working go back and try to figure out why. Like cooking, if something doesn’t come out right the first time you don’t just abandon the recipe, you try again to see where you went wrong until you get it right.
  • Make sure the box, bin or whatever you use to hold things to be filed, isn’t too big allowing you to wait so long to actually clean it out, making it take so long and therefore a hassle.
  • Do it more often so it takes less time. For instance I vacuum my apt about every other day which takes about 3 minutes. When I wait a week, it takes closer to 20 minutes which is kind of annoying… The moral of the story is do these little things that you have to do more often and it won’t be so bad. Or get an assistant to do it!

living better with less… junk mail

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I always laugh when I see articles and blog posts about dealing with your mail; buying special mail sorters, have a recycling bin near the door… bla bla bla…The real solution as with most things in life is to simplify. The less mail you have, the less time you have to spend dealing with it.

Collect your junk mail for about a week to see where your mail is coming from so you can stop it for good:

  • Stop pre-approved credit card offers at OptOutPreScreen.com. BUT this doesn’t stop offers from banks you have accounts with, you need to call them directly
  • For unwanted catalogs, all the info you need is usually on the back page; customer service phone number, account number (if you have one) and/or source code. After calling, you can also go to CatalogChoice.org to further stop them
  • Switch to paperless billing for all your accounts; credit cards, banks, electric, gas, phone…
  • Stop most other junk mail at DMAchoice.org.