What’s the number one organizational downfall people share across the board?
Good thing it’s one of my favorite things to organize! I can completely empathize with walking into your kitchen, cubicle, or office and feeling so overwhelmed by your receipts, bills, etc. that you don’t even know where to begin. Don’t let that stop you from taking control of that paperwork! I’m here to help.
The foundation of well-organized paperwork is a command center in your home. Whether it’s your home office, a nook in your kitchen, or your entryway desk – make it organized so you will actually use it. We have a two-tiered hanging basket that is labeled “Jon” and “Ellen” and it’s where all of our mail goes when it comes in. We try to clear it out every weekend and file things in the appropriate places.
Luckily, we are a pretty paperless home and have no need for a filling cabinet! I do however have a few folders for my personal files that I find quite useful. “Credit cards” contains the cardholder agreements that can be difficult to track down online – I write at the top of each one the date my 0% interest rate ends and the main benefits of each card. “Tucker” contains my kitty’s adoption certificate and health records; “Medical” contains my health insurance paperwork and immunization records; “Education” includes transcripts from every school I’ve attended; “Guitar Chords” keeps handy paper chords and lyrics for jamming without my laptop, which I find much more carefree; “Very Important” holds my passport, WHO card, social security card, marriage certificate, and birth certificate. Ideally these would be kept in a fireproof box; “Tax Documents” contains current pay stubs; and “Mobile Deposits” contains the checks I’ve deposited with my phone (these can be shredded once I receive my bank statement).
Now, let’s break this down by category.
Many of my clients keep receipts out of fear: “What if I return that guilty purchase?” or “What if it’s tax-deductible?!” Here’s the thing: Your basic grocery store receipt is not going to get you any tax deductions. Toss these every day receipts and know what is tax-deductible in your life. Keep receipts for items you believe you may return as long as you can return it – most stores include their return policy on the bottom of the receipt. If you own your own business, it could be everything from gas to office supplies. For most people, it’s charity donations, medical and childcare expenses, and any purchases relevant to your income. I suggest using a small accordion file like this with labeled tabs for each category. They’re also great for organizing our next category…
How many of us wish we were extreme couponers? The amount of money you can save with coupons is extraordinary, but the average person doesn’t have the kind of time on their hands required to pull it off. Luckily more and more businesses are making their coupons digital so all you need is your smart phone – going paperless is always the best policy! Besides the time spent clipping and digging for coupons, they also expire! And sometimes they might lead us to buy things we wouldn’t normally be spending on.
When you do come across useful coupons worthy of your space, I suggest categorizing them as: grocery (make categories for each store you frequent), convenience, restaurant, entertainment, errands, and house. Using the accordion file mentioned above, you can toss it in your purse and pull them out when making your grocery list for the week. I also suggest putting expiration dates in your calendar for the most important coupons!
Destiny’s child taught me my first lesson about bills – you gotta pay ’em.
Online bill pay changed my life. I have two credit cards I use to increase my credit score, I pay for everything with them so I get cashback and airline miles! I set my own credit card due dates to coordinate with my pay dates and put them in my calendar. You can even set them to automatically pay in full each month so you don’t have to worry about interest or penalties. Even rent can be paid with online bill pay through your bank. My student loan servicer has an online automatic payment option as well. There is really no excuse to write checks, stuff envelopes, and stick stamps on bills anymore! And no excuses for late payments.
However, they may arise an occasion in your life where you have to pay bills the traditional way – a paper bill arrives in an envelope, you open it, write a check, put it in a new envelope, address it, stamp it, put it in your mailbox. This brings me to an extremely important lesson in organization:
“How You Open Your Mail”
How you open your mail is the foundation of an organized home. If you want to stay organized, you must open your mail immediately near a recycling bin and shredder to dispose of envelopes and junk mail immediately. Take care of anything urgent right away, or at least file it in an inbox or “To Do” folder and schedule a time to finish the task on your calendar (I schedule all of my tasks on my phone calendar with alarms and reminders). Only keep things that are absolutely essential and contact companies to choose paperless electronic communications if possible. File everything else away in the appropriate place – every piece of paper should have a home, and hopefully it’s the recycling bin.
Back to bills. If you are old school, Martha Stewart suggests creating in-boxes for each pay day and placing upcoming bills in the appropriate box. Once they are paid, she recommends using an accordion file folder labeled by month and not the type of bill (source). But please don’t keep bills after you received the canceled check or bank/credit card statement, unless you will use them somehow come tax time (for example, if you rent out part of your home for income).
4. Other Documents
Here are the document retention guidelines I follow when working with clients, adapted from Martha Stewart:
A. Auto Records: Keep for as long as you own the vehicle and hold onto sales-transaction paperwork for 6 years after the sale of the vehicle.
B. Insurance Policies: Keep for as long as you have the insurance and shred as soon as you switch.
C. Warranties and contracts: Toss as soon as they expire.
D. Paid bills: Once you receive your bank or credit card statement you used to pay the bill, these can be shredded. Only keep bills and receipts pertaining to insured purchases.
E. Paycheck Stubs: Keep for one year until you can cross-check with your W-2 from your employer, then shred.
F. Quarterly Investment Statements: Keep until you receive your annual statement, check, then shred the four quarterly ones. But hopefully you are already receiving these statements electronically!
G. Credit Card and Bank Statements: I don’t know anyone who still receives paper statements. Your bank definitely offers a web log-in with a record of your statements, so please contact them if you are still receiving paper! However, if you prefer paper records, keep these for seven years because they can be used as a back-up come tax time and for proof of insurance claims.
5. What to Keep Indefinitely
A. Receipts and Documentation for Tax-Deductible Purchases
B. Tax Returns
C. House Related Records
D. IRA Contributions
E. Annual Investment Statements
F. Birth, death, marriage, and adoption certificates; Social security cards; passports, wills: Keep in a fire-proof or safety deposit box.
A Note on Going Paperless
Sign up for paperless electronic communication with everyone you can – your bank, credit cards, insurance companies, etc. Please invest in a scanner and shred and recycle all that you can! See my post on virtual organization here.
None of this advice matters if you don’t maintain! Set aside an hour or two every Saturday or Sunday and empty your in-box and complete your task list. Recycle what needs to be and shred anything containing account numbers or other sensitive information. Scan and save what you can to your personal computer and back it up with a hard drive or cloud storage.
I truly believe that if you can take control of you paper clutter, your life will be much simpler and happier!