Start the New Year Off Organized!
Does your filing cabinet look like a pack rat has turned it into his home sweet home? Unravel the rat’s nest and make sense out of all the confusion by following these tips to organize your important records the easy way. Send that rat packing, once and for all.
Never destroy these nine documents. The Federal Trade Commission recommends safeguarding these important official papers.
Social Security card
Birth certificates, death certificates, and adoption papers
Passports and citizenship papers
Marriage and divorce decrees
Stick to this shredder schedule. Hang on to tax-related receipts and canceled checks for seven years before you send them off to the shredder. Why? The IRS has up to seven years to audit you.
Other papers, like your bank statements and medical bills, can be destroyed after one year. Scrap your pay stubs, too, as long as they match up with your W-2. But shred your credit card and utility bills every month, as soon as you pay them.
And don’t worry about keeping track of most sales receipts. Go ahead and shred them — unless they’re related to your taxes, insurance, or warranties. You may want to keep receipts from home improvement projects as well. Certain expenses may help lower capital gains taxes if you make a large profit when you sell your home.
Keep them safe and secure. Now that you have your papers in order, how should you store them? Documents like bank records, pay stubs, medical bills, and tax documents are best kept in a fireproof safe.
For records that are difficult to replace, like birth certificates and Social Security cards, invest in a safe-deposit box at your local bank. You’ll rest easier knowing your paperwork is organized and protected.
Now that all of your documents are in order, turn to page 47 in The Retirement Survival Guidebook to learn how to start shrinking your debt —fast!
- FC&A Staff Writer