How long do I keep my files? How do I get rid of them? ……
Many people aren’t sure how long to keep certain files on hand before getting rid of them. This can be tricky because many people say different things. I rather be safe then sorry. This is the system that I use and it’s been great so far.
1. Important Papers ~ Forever Files
All important documents I keep indefinitely. These documents would be birth certificates, social security cards, marriage license, divorce papers, will, trust, and even death certificates. Create a folder for each person.
Your “Paid Off” file should hold documents of loans/debts that you had. These should also remain in your file indefinitely. You never know when there will be a problem or someone misplaced a paper that said this loan was paid.
2. Warranties ~
These documents should be kept for as long as the warranty is good. I also keep big-ticket items in a file until I no longer have that item. This is important for many reasons. If anything thing should happen , you can return it with your receipt. It’s also good if your home gets robbed, you have proof of all your belongings and how much you paid for insurance purposes.
Tip: You should have pictures of all your big-ticket items along with receipts and warranties just in case you need it for insurance purposes.
3. Bank Statements ~ 2 Years
This may be a tricky one for some people. I like to have at least 2 years worth of bank statements in my file. Especially if your self-employed many lenders want more history.
Many banks have your online statement available online. Not sure how far back they go.
4. Utility Bills ~ 1-3 Years
I usually keep my utility bills for that current year then shred them when the new year comes around.
If you use certain bills as a tax write off for work, then I suggest you keep these bills for at least 3 years. If you have a home office or work from home and claim these bills on your taxes then save them for 3 years because the IRS has 3 years to come back at you because you claimed them on your taxes.
5. Taxes ~ 7 Years
I save up to 7 years worth of back taxes at all times.
6. Policies ~ Varies
You usually get a new policy every year for your car or home etc. I would keep these statements as long as the account is still active. Like I said, you usually get a new policy every year just in case there are any changes. Once you receive the new policy, add that one to the file and remove the old one. If you don’t receive a new one ever year just keep the old one or you can always call them to send you an updated one.
7. Investment Statements ~ 3 Years
If you have any investments then you know they tend to send you a statement every few months. I keep all my investment statements until I receive the annual one. When I receive the annual one, then I will toss out the other quarterly statements. I keep my annual statements for at least 3 years.
It’s always a good thing to prove easily that you paid your taxes when you needed to withdraw or cash out on some of these investments.
8. Pay Stubs ~ 1 Year
I like to keep my pay stubs for all income at least a full year. I usually toss the pay stubs when I do my taxes and receive my W-2 statement.
Remember if you’re not sure about something, call your tax person and ask as many questions as you need to. Everyone has different tax needs so make sure you’re doing the right thing for you.