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organizing finances

Alysha Klein
By Alysha Klein - August 21, 2017

GettyImages-525567903.jpgAre you looking at your finances and thinking, “What a mess! Look at these files all over the desk.” Don’t worry. I’ve got some tips and tricks to help alleviate some of your file cabinet stress.

How long to keep paperwork?

It’s important to know and understand how long to keep important documents, you don’t want to get carried away and toss everything but in the same respect you don’t want to keep every last document… you’d need a house not a file cabinet.

*Pay checks: Be sure to keep your pay check stubs until you receive your W-2 and can verify the funds. If you have direct deposit, your paycheck stubs will be kept within an online system. If you are given a check for your paycheck, be sure to detach the paycheck stub and file it for the year. This way you can be sure that your wages are correct come tax season. Once you’ve filed your taxes, you are good to go ahead and shred the documents.

*Financial records such as copies of deposit slips, ATM receipts, debit card receipts, canceled check receipts, mobile deposited checks, and even credit card receipts should be kept until you can verify with your credit union that transactions are complete. Once you have verified the items you can shred the documents.

*Account statements: Each month you should be downloading your account statements and reviewing them so that you are aware of your spending habits and any discrepancies that might appear. My suggestion is to save them on your computer or print and file them for the year. This will be useful if you need to look back on bills paid, if you need to refer to them for your taxes.

                ** If you have a business, you should be holding on to these for at least seven years. This way if auditors come around, you are prepared and can provide all financial statements regarding your business and income.

*Bills: When it comes to paying your bills, you really only need to keep the bill until the payment is posted. However, sometimes you find people want to file their bills to keep track of the monthly payment. It’s an easy way to verify how much the bill is month to month and see that it hasn’t increased. If that’s the case, try scanning the document and keeping it on your computer, this way the file cabinet isn’t too packed. 

*Personal living records: When it comes to your home or rental documents, auto, insurances and even various other loans. It’s important to keep these documents for as long as you have the items. So keep any papers on your rental property for the length of your rental. Likewise, all auto loans and insurance, keep for the duration of the loan period. And if you’re unsure, reach out to those various insurance companies, lenders and loan officers for questions on how long to keep items.

*Medical Bills: Medical bills are important to keep. Once you’ve paid the medical bill note it on the bill and keep all paid bills up to 5 years. Remember to attach a copy of the paid receipt to the bill as sometimes things get overlooked or could get lost and we all know that medical bills go against your credit, so it’s important to have the records in case you need to dispute that bill. 

* Taxes: You should keep copies of your tax returns FOREVER. Not only do they help with the preparation for the following year but they provide proof that you filed your taxes shall the IRS ever ask any questions. Not to mention if you were to be audited for anything you have verification of your tax return and the information that goes along with it.

How to discard?

If you can retain electronic copies of any of your documents, that is the best way to keep them. This will take up less space and you’ll never have to worry about the ink fading away. Otherwise, you’re best bet is to shred any documents which might carry personal information. Always shred documents which hold credit card information, social security information and anything you might feel is personal.  And if you’re unsure… shred it. It’s better to be safe than sorry.

Be safe with your financial documents and help protect yourself against identity theft.

Have a question? We’ll call you.

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