The end of tax season is a great time to look at your personal files and find a better way to organize your papers. Start by taking every paper you kept for your tax returns and pulling them out of your files. Get a folder or expanding accordion file just for these, and mark it by the appropriate year, “Taxes – 20XX.” Keep them for six years, just in case you’re audited. Otherwise, you never have to look at these again.
With those papers out of your way, it’s time to look at how you organize your current paperwork. When you did your taxes, did you find yourself wishing you’d organized things differently? Now’s your chance.
Basic Home Filing System
The purpose of keeping your papers organized is to make sure you never miss bill payments or can’t find paperwork you need when you need it. Whether you keep them in a drawer, a file tote, a binder or somewhere else, here’s a logical way to arrange and use them.
- Bills to be paid. This file goes up front and contains all your current outstanding bills that need to be paid. Once you pay them, you’ll file each individual bill elsewhere.
- Monthly Bills (or Utilities). Depending how many bills you have and keep in paper form, one file may be enough for all of them. If not, I suggest making a file for each vendor. As you pay bills, they get put into this file (or files) and most likely won’t be pulled out again.
- Receipts (not for expenses). Put all your receipts for stuff you might need to return to the store in here. Throw them out (shred them if they were paid by credit card) once you know you’re keeping the item (or the time to return it has passed).
- Receipts for expenses. Receipts you can deduct from your taxes need their own separate file. You may even want to break them down into files for the various types of deductions: entertainment deductions only get 50% off and utilities taxes may get a different percentage off, so you may want to separate them from deductions you can take off 100%.
- Coupons. You may have a coupon wallet for storing these, but if not you’ll need a file for them. Remember to check it before going to the store.
- Bank statements and canceled checks. Put everything from your bank into one folder for reference.
- School records. If you have kids, or you yourself are in school, set aside a folder for all the documentation that comes with that. This is especially helpful if you have school loans, since it’s likely you’ll want to call your loan provider at some point in the loan either to bargain for a better interest rate or to consolidate that loan with some others.
- Correspondence. You may want a file for letters or greeting cards so you can remember to correspond with people who include you in their correspondence.
- Insurance. When you actually need insurance papers or contact information, it’s nice to have it handy.
- Medical. You may need a separate folder for everyone in the household, depending how many medical issues you have in a year. I personally don’t keep documentation on every doctor visit, but if you have surgery or unusual treatments, it’s a good idea to hold onto things until you’re sure they’ve been paid by insurance. That way you’ll have less stress if someone tries to charge you for something you know got paid.
- Warranties and Product Information. Keep all your warranties and product brochures in another file. This one can be challenging since vendors insist on making gigantic and awkward-sized folders full of crap for your warranty.
- Car Maintenance and Repair. If you own a car, it’s a good idea to hold onto records of repairs and maintenance. That way when you go to trade or sell it, you have proof it’s been kept in good shape.
- Miscellaneous. There is a hard and fast rule in the universe that once you become completely organized and have a place for everything, the universe will throw you something weird to handle. That’s why every system needs a place for stuff that has no place.
Another option is to do this same filing system digitally. Keep only the original papers you think you need, and scan the rest. Set up a folder on the computer called “File Cabinet”, then set up subfolders (and sub-subfolders, if you want) with the same names as you would give to physical files to organize your scans. If you’re new to scanning, this might sound intimidated, but it’s very easy to get used to – and no more clutter!