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Declutter Your Documents

March 05, 2021

If you needed to quickly get your hands on a copy of your homeowners insurance, your Social Security card, and your birth certificate, could you do it? If the answer is no, it may be time to give your filing system a deep clean. Many of us have filing cabinets that are stuffed to bursting. Tackling this project along with your other spring cleaning items can help make sure that no matter what life throws at you, you can find what you need without a hassle. Besides being able to find what you need when you need it, decluttering your paperwork gives you a chance to review your spending habits and your long-term financial goals. It can also make check-in meetings with your financial professional quite a bit easier (and avoids the embarrassment of showing up with a shoebox full of receipts). Before we move on, you should know this article is for general guidance and informational purposes only and isn’t a replacement for real-life advice. Make sure you check in with a tax, accounting, or legal professional before modifying your financial document strategy.

Overhaul Your Filing Cabinet

We’ve all been guilty of tossing things like appliance manuals and old restaurant bills into the first drawer we have handy. Start by opening those drawers, pulling out all your file folders, and systematically sorting through every single one. If this is overwhelming, just start with one folder at a time. Have a “keep” pile that you’ll file, and a “toss” pile (we’ll talk about  shredding in a minute). For the items you’re keeping, make sure each folder is clearly labeled and that the paperwork inside matches the category of the folder. Cleaning up your filing cabinet doesn’t have to be boring. Get some fun-colored folders and markers to keep yourself organized. If you’re really ambitious (or your handwriting isn’t the best), use a label maker to keep everything easy to read. While everyone has their own system, sorting your files alphabetically is classic and can make them easier to search in a hurry. You can make your bookkeeping system even leaner (and greener) by switching to electronic documents and using a scanner to preserve printed copies. Just make sure you have digital back-ups on both a cloud system and a physical hard drive. Many investment firms, banks, and credit card companies will gladly swap you from paper statements to digital ones you can access online.

Annual Document Cleanup

If you prefer paper documents, there are quite a few that you can probably get rid of on an annual basis. These include bank statements, credit card statements, old medical bills, utility bills, and statements for services you no longer use. However, to protect any sensitive information, you may not want to simply throw them in the garbage. Consider investing in a paper shredder, or take them to a local business that offers paper shredding services. One important note: If you need an item for your tax return, or it’s still being resolved, hold on to it. If you’re not sure, it’s better to be on the safe side, so tuck it into a folder.