Manage finances by managing your office clutter

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Manage finances by managing your office clutter

Can't manage finances because you can't bring yourself to enter the messy, disorganized world called your home office? After all, how do you track expenses with online software if you can't even find the file folder with the last two months' receipts? You start by taking these steps.

Before you can create order, you must create a little chaos. Get ready to clear every item out of your home office, making decisions as you go. Get bags, boxes, or floor space for five categories: Keep, Toss, Donate, Sell, and Pass On. But wait. This could get confusing if you aren’t careful.

 

You’re sorting through a huge variety of items, everything from paper clips to computer manuals to tax records. You don’t want your Keep pile to become a huge mishmash of items you’ll have to go through all over again. As you go through each zone and select things to keep, group similar items at the same time. Essentially, you’ll be creating mini-piles within your Keep pile. This will help you quickly see what size containers you’ll need. You’ll also be able to see at a glance that you have 500 rubber bands, probably 450 rubber bands too many.

 

Your paper items will be the most daunting, but don’t get bogged down trying to attend to each piece now. Go through mail and anything that is not in your filing cabinet first. Create one stack for pieces of paper that need to be filed and another one for pieces that require some kind of action.

Save your filing stack and your filing cabinet for last. Sit down at your newly organized desk, and look at your files. You’ll have to make some unique decisions in this area.

For one thing, you’ll need a different “keep” test for your files. You won’t save a document just because you love it. Come up with criteria like this — requires action, information would be difficult to replace, or save for tax or legal reasons. In addition, you’ll pull out and archive anything over a year old. Generally, you keep only the current year’s records in your active filing system.

Are you holding on to papers from 20 years ago? This handy guide will help you know how long you should keep certain personal documents — and when it’s OK to toss ‘em.

Keep forever:

  • Income tax returns and payment checks
  • Retirement, IRA, and pension records
  • Investment trade confirmations and investment records for stocks, bonds, and mutual funds
  • Legal records
  • Bills for big-ticket purchases — like furniture, jewelry, appliances, computers, cars, etc. (in case they’re destroyed, stolen, or damaged)
  • Home purchase and improvement records and receipts
  • Important business correspondence
  • CPA audit reports

Keep 7 years:

  • Documents that support your tax return figures such as bills and canceled checks
  • Tax-related medical bills
  • Tax-related sales receipts, utility records, and other tax-related bills
  • Property records/builder contracts
  • Accident reports and claims (even if settled)

Keep 4 years:

  • Credit card statements
  • Medical bills (for insurance problems)
  • Expired insurance policies

Keep until...

  • Credit card receipts until you verify them on your statement
  • ATM receipts until you verify them on your bank statement
  • Car records until you no longer own the car
  • Leases until seven years after they expire
  • Pay stubs until you verify them on your W-2
  • Sales receipts until the warranty expires
  • Warranties and instructions until you no longer own the product
  • W-2 forms until Social Security benefits begin

Both laws and IRS rules are subject to change, so check with your accountant or attorney before tossing any legal or financial papers.

Shred after recording:

According to the Washington State Office of the Attorney General, you should shred these items — preferably with a crosscut shredder — once you no longer need them for your records.

  • ATM receipts
  • Bills for telephone, gas, electric, water, cable TV, Internet
  • Bank statements
  • Canceled or voided checks
  • Receipts with checking account numbers
  • Credit and charge card bills, carbon copies, summaries, and receipts
  • Pre-approved credit card applications
  • Credit reports and histories
  • Investment, stock, and property transactions
  • Magazine and junk mail address labels
  • Birth certificate copies
  • Employee pay stubs and employment records
  • Legal documents and insurance documents
  • Luggage tags, travel itineraries, used airline tickets, expired passports and visas
  • Medical and dental records
  • Papers with a Social Security number
  • Report cards
  • Transcripts
  • Resumés or curriculum vitae
  • Signatures (such as those on contracts or letters)
  • Tax forms
  • Expired credit and identification cards including driver’s licenses, college IDs, military IDs, employee badges, medical insurance cards, etc. (Cut cards up if you can’t shred them.)

 

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  • FC&A Staff Writer