How to Spring Clean Your Financial Paperwork

If you’re in the midst of spring cleaning, one area that could probably use some tidying is your financial paperwork. Taking the time to determine what to keep and what to throw out can not only clean up your finances, it can help you stay organized and ensure you’re not throwing out any essential records.

We’ve got a few handy tips for what to keep, what to toss and how to organize it all:

What to Keep (And for How Long)

  • Forever Items – The important documents that you need physical copies of include everything from your birth certificate, marriage license, and powers of attorney, to tax returns, wills, and social security card. Make a copy of these for your records and keep the originals in a safe place. 
  • For One Month – Keep receipts for any credit card purchases you make until you receive your statements, as well as monthly credit card statements until you pay them off. 
  • For One Year – Keep utility bills, pay stubs, brokerage statements (until you receive your yearly statement), and bank statements for one year before tossing them. 
  • For Seven Years – You should hang onto any supporting tax documents including W2s, 1099s and other supporting paperwork for seven years. Additionally, keep IRS forms filed when you make contributions to IRA or Roth accounts, as well as retirement and brokerage annual statements.

What to Destroy (And When to Do It)
Keep in mind the timelines outlined above for holding onto your financial documents. And when the time comes to dispose of them, anything containing your Social Security Number, Tax ID or financial account numbers should be shredded to protect your accounts and personal information.

If you have a large amount of documents that need to be destroyed, only shred those with important financial information on them to save yourself time and money. The rest can be tossed. Make sure you’re also taking the necessary measures to delete or destroy any digital files or computer hard drives.

How to Stay Organized
To avoid a pile of paperwork, set aside a day of the week where you file your important financial documents into categories and files. At the same time, take stock of what documents can be destroyed and whether they’ll need to be shredded or not.

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