Taming Your Paper Tiger
Are you looking at your home office and thinking that you will never get it cleaned and sorted? Have you lost an important paper or tax document that you need to file taxes? Take heart, your paper clutter can be dealt with and be changed from a roaring tiger to a shy little kitten.
Your home filing system should have temporary files for organizing current transactions, statements and receipts as well as permanent files. One of the biggest questions I get is how long do you need to keep certain documents? Most important documents like the ones listed below should be kept forever.
- Permanent records
- Prove certain events occurred such as; birth, death, marriage, adoption, divorce
- Professional certificates or licenses
- Immunization records
- Medical history & information
- Wills, Trust documents, Durable Power of Attorney (update as needed)
- Income Tax Records
- Three Years - Records that support income and deductions (W-2, 1099, canceled checks or receipts for charitable contributions or any other deductions or credits taken)
- Six years - If you failed to report at least 25% of your income
- Seven years – If you are potentially writing off bad debts or securities
- Ten years – If you paid taxes to a foreign government
Paper clutter can be sorted and organized just like you do to the rest of your home. It should be sorted into files you need to keep or store, items to dispose or shred and papers or documents that you need to give or in the case of a vehicle title, possibly sell. Sorting paper is cleaning, so start with a positive attitude and dive in! If you are having trouble getting started, set a timer for 15 minutes and you will be amazed at how much you can accomplish in a short amount of time.
Paper clutter may consist of newspapers, magazines, mail, bills and other documents. Try to handle your papers as little as possible, meaning if you bring in the mail, sort it into either the trash, a place for filing your documents and a place to keep bills until they are paid. One trick is to write the due date and amount of the bill on the envelope in which they came. This will help you to keep track of how much and when it is due.
This list will give you a place to start in getting your documents in order. Just be sure that if you are going to tackle this that you must make a bit of effort to get started. Set some realistic goals for taming your paper tiger. It is helpful to set aside some time each week to work on it. If you have family members that can pitch in and help, please get them involved. Remember that your piles of papers did not accumulate overnight, so it may take a bit to get through it all.
My challenge is for you to get your files and papers in order before the end of the year, so that the next time you need to find a receipt or document, it is right there at your fingertips.