On the last day of school, my kindergartner’s teacher presented me with a folder in which she had carefully preserved in plastic sleeves the one or two best pieces of art or written work my daughter had made for each month of the school year. With the folder in hand, I was able to let go of the rest of my daughter’s art work sitting in various drawers in the kitchen, a collection that included a flower made out of pinto beans (that one attracted ants) and a candy cane made out of glitter (the drawer that one was in can only be used to store glitter now).
The folder got me thinking about how we store our really important papers. How easy is it for you to find the documents you need to prepare your tax return? How do you decide what papers to keep and what to discard? If God forbid something happens to you, how easy would it be for someone to find the necessary information about your family household assets and obligations?
Here are some tips on how to organize your important family and household records.
What Paper to Keep and for How Long
First things first, exactly how long do you need to hold onto a piece of paper? Believe it or not the answer is not “until it longer gives me joy.”
- Legal documents (birth certificates, citizenship papers, marriage certificates, adoption certificates, divorce decrees, wills, death certificates)
- Papers that prove ownership (deeds, records of paid mortgages, contracts, automobile titles, leases, and notes)
Keep While Active
- Insurance documents
- Bond and stock certificates
- Property tax records for disputed bills
Keep for Three to Seven Years
- Tax returns and supporting documentation (Forms W-2 and 1099, bank and brokerage statements, records of selling a house, tuition payments, charitable donation receipts, and any other receipts, cancelled checks, or other documents that support income or a deduction on your tax return)—depending on your filing circumstances, the IRS may be able to ask you for supporting documentation for three to seven years
Keep for One Year
- Checkbook ledgers
- Paycheck stubs
- Monthly mortgage statements
- Expired insurance records
Keep for One to Three Months
- Utility bills
- Sales receipts for minor purchases
- ATM and bank deposit receipts
Until You Don’t Cry When You Look at It
- Your Kid’s art work
Where to Store Paper
Now that we know how long we need hold onto paper, where should we store it?
Put in a safety deposit box items that can’t be replaced or would be costly or troublesome to replace. Important documents that should be kept in a safety deposit box include the following:
- Documents that are government or court recorded (marriage certificates, divorce papers, adoption papers, citizenship records, passports, social security cards, and service papers)
- A copy of your will
- Bond and stock certificates
- Papers that prove ownership (mortgage papers, contracts, automobile titles, leases, notes, and special papers like patents and copyrights)
All other documents can be kept in your home filing system (which hopefully resembles a file system and not a stack of papers on the kitchen counter). So someone else other than you can make sense of your financial situation in the event of an emergency, make sure you keep in your home filing system a book containing the following:
- A list of your savings and checking accounts
- The name and branch of the bank where you keep your safety deposit box and an inventory of what is in the box
- All of your family’s social security numbers
- All of your insurance policy information
- A household inventory
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