Financial Spring Cleaning

Know what documents to keep and toss

By Karen Lee

There’s something scary about getting rid of statements and documents. Despite the hassle of filing paperwork, you feel like your finances may cease to exist if there’s nothing printed out to prove it. In today’s digital marketplace, going paperless is a safe and realistic goal, as long as you keep a few things in mind.

 What to Keep

  1. Documents that pertain to assets bought or sold. Keep car titles, land deeds, mutual funds, stocks and bonds. You must be able to prove what you paid in case you want to sell.
  2. Retirement account forms 8606, 5498 and 1099-R. These forms prove what has gone in and out. It’s not necessary to keep the statements.
  3. Legal documents. Examples: marriage and birth certificates, Social Security card and immigration documents.
  4. Tax Returns The IRS recommends keeping returns for seven years.
  5. Loan statements, including your mortgage. Keep the initial document, a record of all payments made and proof of final payment. Once it’s paid off, you can get rid of all the other stuff.

What to Toss

  1. ATM/credit card receipts, bank statements and pay stubs. Keep for one month until your bank statement is reconciled.
  2. Receipts for minor purchases after a couple of months. However, keep receipts that pertain to taxes with your tax return information.
  3. Utility bills and old insurance claims. Bill statements are available online. Once insurance claims are settled and you cash your check, you no longer need your records.
  4. Social Security settled Investment Statements. These are all archived and available upon request. You can also go to www.socialsecurity.gov for an updated social security statement and print out your statement as often as you like.
  5. Remember to shred everything you get rid of and scan a backup copy of what you keep for cloud or external hard drive storage. Also consider setting up a separate email account. That way, online bills won’t get sent to your spam folder.

Still feeling uncertain about transitioning from paper statements? Take baby steps. Start by going paperless with convenience utilities like cell phone bills. Just be careful—going paperless doesn’t mean you can be negligent. There’s no good excuse for bad bookkeeping.

Karen Lee’s passion for helping people achieve their life’s goals has moved her to reach an audience beyond her practice as a Certified Financial Planner™. She is a frequent guest on CNN Newsroom and her articles have appeared in both industry and consumer publications. She is the author of the book, “It’s Just Money, So Why Does it Cause So Many Problems?” www.facebook.com/karenleetalksmoney

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