Spring Into Order: A Practical Guide to Sorting Financial Documents

Spring Into Order: A Practical Guide to Sorting Financial Documents

So much of our financial lives unfold online these days — from checking e-bank balances to paying off lines of credit. When the rare paper letters, contracts, and bills arrive, you might not have a system in place to store this paperwork. It all gets put in “the pile” — a messy, disorganized stack of paper that makes finding important info difficult.

The spring-cleaning season is the perfect time to check in with your financial paperwork. With this article’s help, you can transform this out-of-control pile into an orderly setup. Below, find out what you can throw away safely, and what to keep for your records. 

Throw Away Old Receipts 

You don’t need to keep most receipts. Of course, exceptions do exist. You want to hang onto important receipts you claimed on past taxes or receipts you intend to file with your future taxes. Put these aside with other tax documents — we’ll get to those later.

You should also keep the receipts of large purchases, like a new appliance or car. These receipts are not only your proof of payment, but they may also be necessary if you need to access your warranty or return a faulty item.

What Belongs in Your Keep Pile?

Once you remove your unwanted receipts, move through your paperwork and separate them into these three piles:

1. Bills and Banking

Most banks keep your monthly bank statements on file as a PDF you can access online and download. However, you may still receive paper statements if you opt for this service. Generally speaking, you can discard them every 60 days.  

During that period, pour over your accounts to ensure there are no surprise expenses or withdrawals. Do the same with any paper bills you receive in the mail. You don’t have to keep them forever, but you should review them to catch possible fraud

Once again, keep statements if you need them for taxes. The same goes for end-of-year summaries on investments. 

2. Debt 

It’s not unusual to receive a welcome package when you sign up for a new credit card, line of credit, personal loan, car lease, or mortgage. These packets contain all the need-to-know details of your loan contract, including interest rates, terms, and conditions. 

You should keep these documents for the lifetime of your personal loan or line of credit. However, you may want to retain them for longer.

If you have lost this paperwork, reach out to the financial institution that funds the loan. If your lender is like Fora Credit, you can chat online, text, call or write to learn more about your line of credit whenever it’s convenient. 

3. Taxes 

Tax documents are perhaps some of the most important things you need to keep. Officially, you should keep tax returns and their supporting documents for six years. This goes for digital and paper copies of anything related to your taxes. Unofficially, some financial advisors say you need to keep tax records forever. 

Make Your System

Now you have your four piles (receipts, banking and bills, debt, and taxes), you need to put them somewhere. Don’t just put them back into a single pile. Consider investing in a file cabinet or accordion file. You can keep each category together, labelled, and separate from others, so you can find important paperwork in less time.