When it comes to spring cleaning, I’d rather organize my basement 10 times than sift through a single mound of paper. But that dreaded task of sorting and filing documents is an important one, even in the digital age.
Knowing what you should keep and what you can toss is the hardest part. Here are some guidelines that should make the process a little easier.
Just be sure to shred everything before you toss it, to keep it safe from identity thieves.
• Receipts for purchases. Toss receipts for shoes and clothes after they’ve been worn, since you usually can’t return them after that. Toss grocery receipts after the food has been eaten.
Some people like to hang onto receipts for everything they buy, and that’s OK. But most reputable manufacturers will work with you to repair or replace a defective item even without a receipt or the item’s original packaging.
If an item comes with a warranty or guarantee, keep the receipt for the life of the contract.
For insurance purposes, you might want to hang onto receipts for big-ticket items, such as jewelry and home improvement projects.
• Credit card receipts. Save them until you get your credit card statement, and toss them once you’ve checked your statement for discrepancies.
• Credit card statements. Hang onto them for one year. Credit card companies usually archive older statements electronically whether you have an online account or not, so there’s always a way to access older statements if you have to, according to CreditCards.com.
• Warranties and guarantees. Keep them for the life of the contract.
• Paid utility bills. On each bill, jot down the date and amount paid along with the check number or confirmation number. Keep the bills for one year, in case you run into a discrepancy later.
• Pay stubs. Keep all your pay stubs for the year until you can check them against your W-2 tax form. Once you’re sure there are no discrepancies, you can get rid of them, but hang onto the W-2s indefinitely, suggests the Social Security Administration.
• Medical bills. Hang onto these for up to five to 10 years after the treatment has ended, suggests consumer advocate agency Public Citizen. Because many parties are billed at once, and there can be discrepancies among providers, patients and insurers, billing mistakes are very common. You’ll be glad you have proof if one of these costly errors comes your way.
• Payments on loans, leases and installment plans. Save the individual bills until you match them with your quarterly or annual statements, then toss them and keep the statements until everything is paid off.
Once it’s paid off, get rid of everything except the document showing you’re paid in full, and keep that for the life of whatever the loan, lease or installment plan was used to pay for.
• Life, homeowner, auto and liability insurance policies. Keep them for the entire time the policy is in force. You can toss an old policy once its renewal comes to replace it.
• Statements for retirement and savings plans. Keep the quarterly statements until you can check them against your annual summary for discrepancies. Keep the annual summaries indefinitely.