Record Retention


How long should I keep my paper?

Hopefully, by now, you are starting to shift towards paperless bills, automatic bill payments, and e-statements. If you haven’t tackled one of those yet, I’d encourage you to make it a priority. It saves you a lot of time, you will never be late on a payment and you can always view the statement when it comes in the mail or via email so you stay in touch with your spending.

If you are still collecting papers and your files are outdated, I’d like to suggest a few of the following tips for helping you catch up with paper. Over the years I find these are the repetitive suggestions I bring up with most clients.

Keep only seven years (if not less) worth of tax papers

I know several of you have the tax return packets but the majority of you have the rest of the tax year paperwork strewn about or mixed up. Only keep paperwork that supported your tax return as income or a deductible expense. And keep this paperwork by year with the tax return so you can easily pitch old years, as new years pass. Here are examples of each. The income you should track would include: pay stubs, W2’s, 1099’s, sale of stock or other investments, cashing in a bond, sale of a home, etc. Deductible Expenses would include property tax bills, donations to local charities, 1098 mortgage interest, student loan interest, business expenses if you own a business, and eligible health expenses.

Toss old policies whether it’s insurance or 401k policies that you’ve rolled over

The period is over. Move on and most policies you can log into an online portal to review the policy.

Shred monthly financial statements from investment accounts

You will get a year-end recap and statement to use for taxes. The individual monthly statements are a waste of paper and space. Log in online instead and look at your investment levels that way instead.

Stop saving utility bills, phone bills, and lawn maintenance bills, etc

None of these regular household expenses is tax-deductible unless you run a business from home. Keep one set of all your monthly expenses and go paperless. You’ll have your accounts and phone numbers with that one set in the drawer in case you need to look something up quickly.

Toss old checkbooks that are used up

You have bank statements and online banking to refer back to checks and pay bills through your bank’s website instead of writing old fashioned checks.

Toss receipts

Don’t keep them. Scan them in or request emailed receipts. There are only two exceptions to this advice. The first is if it’s an expense that can be deducted for taxes. If the answer is yes, then save them electronically or as a hard copy.  Secondly, if you’ve just spent $6,000 for a new roof, you’d probably want to save a receipt like that. Anything else, in my opinion, is fair game to toss. And remember, you can always scan in these receipts or snap a picture of these and toss them.

Start refusing and declining receipts as well. You can tell the gas station not to print a receipt. You can refuse your receipt at Starbucks. You can tell any store you don’t want the receipt. No one is forcing you to take them, so just don’t accept them in the first place. Thus, your wallet and purse will stay clutter-free.If you need to submit receipts for reimbursement to your health insurance or employer, have a plan in place to keep them organized and to know which have and have not been submitted. Whether it’s scanning into the receipt or keeping a hardcopy to submit to your company, the key is to be consistent with your system.  So stick to whatever you set up and remember to keep it simple.

Keep all medical bills until you reach the end of the year

Then if we have no major medical problems, I feel safe to shred them.  There’s no deduction for medical bills unless you paid them through an HSA or FSA account OR had a major medical catastrophe that took a large portion of your income. Your medical insurance policy is online explaining all your coverages and policy limits. Just create your online portal with your insurance carrier to avoid keeping all this paperwork. You can also toss the Explanation of Benefits statements that arrive in the mail and request these to be paperless. They explain what was and wasn’t covered by your insurance and are also available when you log into your insurance carrier’s website.

Medical records are permanent

I typically assign each family member a medical record file. This is where you accumulate medical conditions and results over the years. This could be a family member’s allergy report, mental health condition, x-rays, blood type, etc. If you feel comfortable with your provider’s website and online access, some families trust these records to be saved digitally and get rid of the hardcopy.

Prevent newspapers and magazines from piling up

Consider subscribing online and skip the actual newspaper arriving at your doorstep.  If you currently can’t get through all your magazine subscriptions, cancel some and see if you can read through fewer making the most out of your subscriptions. Finally, if you have old newspapers piled up or stacked around your home, give yourself a deadline to get caught up. Or better yet, wipe the slate clean and accept old news as clutter and just move forward.  Don’t feel guilty. Most articles are recycled or redone to keep readers interested.

Don’t clip articles

Trust me, you won’t look back in your files to read them or access them as a resource. It’s so much easier to jump online. When you need to research a specific topic or idea, you’ll look for the latest and most up to date information, not an outdated clipping in a file that you cut out years or months ago.

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