February 20, 2020
Receipts, statements, bills, and other important paperwork seems to pile up relentlessly. Knowing what to hang on to, for how long, and what to discard can be confusing. Follow these simple guidelines to help organize and clear clutter ahead of tax season.
Track daily and monthly account activity by saving receipts and pay stubs until you reconcile them with larger financial records, like your account statement or tax documents.
• ATM receipt and deposit slips. Make sure your deposits and withdrawals match your monthly statement, then throw away.
• Everyday receipts. After you see the purchase correctly reflected in your statement, throw it away.
• Pay stubs. Save until you reconcile them with your tax documents. If you plan to apply for a large loan, consider keeping a few months of recent pay stubs to document your current income.
• Utility bills. When you receive the next bill showing the previous one as paid, throw it out.
• Bank statements. It’s a good idea to keep these for one year, unless the statement shows a tax-related expense, then keep it for tax time.
• Monthly statements. You can usually discard monthly mortgage, credit card, or investment account statements at the end of the year after checking them against your year-end summaries.
It’s a good idea to store documents from larger, long-term purchases for more than a year. Save information about your medical care, investments, insurance, and retirement longer than a year.
• Home purchase documents. After selling a home, keep your documents (appraisal and inspection reports and closing documents) for at least seven years. If you’re renting, you can shred and throw out rental agreements upon receiving your deposit after moving out.
• Tax returns. A good rule of thumb is to keep tax records for at least three years, preferably seven. Save any important documents like W-2s or 1099s, and also any receipts for business, medical, or mortgage expenses you wish to deduct. Also, keep records of any charitable or retirement contributions.
• Loan documents. Save your documents for as long as you have the policy. If you receive a new policy document or change providers or plans, throw out the old one.
• Medical records. It’s a good idea to hold on to hospital bills and health insurance statements for five years from the time you received care.
• Vehicle title. Keep your car title as long as you own the vehicle.
• Major purchase receipts. Save your receipts from big-ticket items like furniture, jewelry, computers, and appliances as long as you have the item. This can help if something needs fixed or returned, or if you need to make an insurance claim.
It’s a good idea to keep certain personal and legal documents forever. It’s a good idea to scan and save digital copies of these documents for easy access and store the originals in a locked file drawer, safety deposit box, safe, or fireproof box.
• Estate planning documents such as wills and trusts
• Birth, marriage, and divorce certificates
• Adoption papers
• Social Security cards
• Education and/or military records
• Property deeds
To keep your personal, financial, and legal information secure, shred any documents that contain personal information before throwing them out. It’s a good idea to switch to electronic versions of documents when possible. Be sure to back up any digital files on an external storage device and keep everything password-protected.
Organizing your personal documents can be overwhelming. If you have questions about what to do with your financial documents or want to change how you receive statements from Citizens First Bank, stop by your local branch to speak with a personal banker.