What should I keep and what should I throw away?
I’ve got the spring cleaning bug and recently came across boxes and files of old financial statements. My husband is self-employed and has boxes of receipts, all filed and organized by year, but many of them are fading now so you can’t even read the numbers. We’ve also gone paperless so some of our financial statements are on the computer while others still come in the mail. I feel like my stuff is all over the place. How can I get more organized and get rid of this paper clutter? What should I do about the receipts that you can’t read?
As we make the transition to a paperless world, it’s easy to feel disorganized if you don’t have a filing system in place. However comfortable you are with going paperless, the prevalence of hackers and identify theft are good reasons to keep hard copies of certain documents, particularly financial statements.
That being said, we are also past the age of keeping shoe boxes full of papers. Unnecessary paper leads to clutter, and clutter leads to a loss of energy. What follows are a few tips to help you get that your paperwork organized so that you don’t feel overwhelmed by paper clutter.
General Financial Paperwork Organization & Security:
You want to store your financial documents in one place, so you can easily get to them every month. You also want to make sure that these documents are safe.
- If you are in the habit of scanning in your paychecks on your mobile device, for example, make sure that you protect both your online account and your device with a hard-to-guess password, and have a plan in place should you lose or damage your phone.
- If you work with a financial advisor, ask him or her to create a binder or folder that contains a copy of all your important documents. As a financial advisor myself, I do this for all my clients because it’s always good to have something you can get your hands on.
This might be an old-school idea, but it still works. In the event of a home fire, power outage, computer crash, or life’s major events such as an accident or chronic illness, you’ll have the pace of mind knowing someone’s got your back.
Bank statements, investments accounts, and insurance policies:
Keep a hard copy of your most recent statements for up to 90 days, and then scan and keep a digital copy. There are online services that offer secure digital data storage. If you find that you are missing a statement, don’t worry. Most financial institutions are happy to send you a copy of the missing statement – all you have to do is call them up and ask.
Tax Returns:
In most situations, you want to keep your tax returns and any supporting documents for at least three years. There are several reasons why you might need to keep your tax returns longer, particularly for those who are self-employed. For the full scoop, read 6 Reasons Why You Need to Keep Your Tax Returns.
Receipts:
Today’s receipts fade after time which makes it necessary to find a back-up method for cash purchases. One recommendation I have is a product called Neat Receipts. For the cost of one night in a nice hotel, you can easily scan and store all your travelling expenses, business expenses and even business cards. The system also files these scans for you, which can save a person a lot of time come tax season, particularly if you are self-employed.
Bottom Line: Come up with a filing system that fits today’s times and take advantage of helpful solutions from financial professionals and online products and services.
Do you have a question about success with money, your business, or life? You can ask Beau anything by visiting AskBeau.com and sending your question(s) in to RichLife HQ!
Helpful Links:
Neat Receipts
https://www.neat.com/products/neatreceipts/
References:
FDIC Consumer News: Managing Money Tips
https://www.fdic.gov/consumers/consumer/news/cnfall12/Fall2012.pdf