Grab your glasses and always pay attention to what you are throwing in the trash! It’s easy to accidentally toss something important that was mixed in with unneeded papers. Being patient when you are decluttering is always wise – separate the good from the bad and try to keep your papers organized so you always have access to your important documents when you need them in the future. There may be a time when you need to find those documents quickly, such as when you apply for a loan, meet with your estate planning attorney, or if you need to leave your home in a hurry because of an emergency.
1. Personal Papers : Birth certificates, military records, social security cards, marriage licenses, ID cards, divorce decrees, and your passport would be on this list.
2. Bank Account Records : Keep these as long as possible! Cancelled checks and receipts should be kept until you receive and reconcile your statements, and ones that are proof of big purchases (or are tax related) should be kept long term.
3. Investment Records : Investment related papers such as trade confirmations or statements should be kept at least 6 years after investing or longer. They are also proof of what your cost basis is so that you can keep track of capital gains and losses.
4. Credit Card Statements and Documents : Keep your receipts to reconcile with your statement. Keep any receipts for items you might want to return (or might need for warranty purposes, tax purposes, etc).
5. Loan Records : All loan records should be kept in a safe place. This includes everything from mortgages to car loans. Retaining proof that you have paid off a loan can be important even years down the road (as there could be a problem with the records of the creditor – you will want to keep your proof that you paid them.)
6. Rental Agreements : Keep your rental agreement for at least 6 years after the end of the lease.
7. Insurance Policies & Related Documents : Health insurance policies can be discarded once the coverage ends, but all other insurance documents should be kept for at least 6 years after the policy is canceled (just in case anything unexpected comes up.)
8. Tax Returns & Related Documents : Anything related to your tax returns should be kept for at least 6 years because the IRS can audit you that far back (not just 3 years .. and in some special cases up to 10) – and if you don’t have your supporting documents readily available they will likely charge penalties.
Be careful when you do perge certain documents and properly shred them to help prevent identity theft. When in doubt, keep a digital copy of the item before destroying it just in case you end up needing it unexpectedly.