“If you want to make an easy job seem mighty hard, just keep putting off doing it.”
– Olin Miller
Organizing paperwork is one of the easiest tasks to put off, maybe because it’s one of the hardest to get excited about. The prospect of sorting through old bills, checks, receipts, and other documents has about as much appeal as a paper cut. But the importance of keeping documents organized and accessible can’t be stressed enough. The longer you wait, the bigger the task. Before that filing cabinet or banker box bursts at the seams, take some time to get your paperwork in order.
Getting Started
Give yourself plenty of time to tackle this project. It may take several hours, a day, or an entire weekend depending on the amount of paper you’ve accumulated over time. Clear your calendar, clear off a large table or workspace, and commit yourself to the task at hand.
There are a few things to gather before you begin sorting:
- Paper bags for items that can be recycled
- Plain paper and a marker for labeling piles
- Garbage bag for items that can be discarded
- Box for non-paper items (they’re in there!)
- Files and labels to hold the documents you intend to keep
Step 1 – Dive In
Let the fun begin! Some items will be easy to deal with, and you’ll probably wonder why you kept them! Envelopes that have been opened and emptied can go immediately into your recycling bag. If you come across unopened mail like promotional flyers and other “junk” paper, recycle those too. The only exception would be credit card offers. Those should be shredded to avoid any type of identity theft.
Save your garbage bag for things that cannot be recycled based on any restrictions in your area. Toss non-paper items into the box to be sorted later – focus on paper first.
It won’t take long to see a pattern emerge. When you come across two of the same type of document – medical, taxes, or insurance for example, take a piece of plain paper and make a label for that group of documents. Add other relevant documents to the appropriate pile as you find them.
Don’t try to organize yet. Just focus on placing papers into the correct pile. This will allow you to break the task into manageable parts if you need to take a rest or can’t get everything done at the same time. Also, some stacks will require more scrutiny than others, so don’t let that slow you down at this point.
Step 2 – Tackle One Pile at a Time and Keep Only What You Need
Chances are, many of the papers in each pile will have a date and you can use that information to help you whittle away. Most home-keeping experts recommend that you keep paid utility bills, annual investment statements, and receipts for non-tax-deductible purchases for a year and no longer.
The Internal Revenue Service (IRS) strongly recommends that bank statements, tax returns and supporting documents, and receipts or checks for tax-deductible expenses be kept for seven years.
Medical records may depend on your individual situation. For an ongoing medical issue, keep records indefinitely. Papers related to temporary medical issues can probably be discarded after one year, unless related to a tax deduction.
Certificates of marriage, divorce, and death should be kept indefinitely, as should education records and financial documents like wills and trusts. Keep contracts as long as they are valid, especially for any type of product or service that has a warranty. Mortgages and deeds related to home or other property should be kept indefinitely, too. All these documents are best kept in a secure location like a safe deposit box. Unless you travel frequently, store your passport in a safe deposit box as well.
Health care directives are another story. The National Hospice and Palliative Care Organization (NHPCO) recommends that you NOT store your advance health directives in a safe deposit box. Instead, choose a safe but easy-to-access location for the original documents, where they will be safe from fire, flood, natural disasters, and theft. Make several copies of the completed documents, write the location of the original document on the copies, and give copies to anyone who might be responsible for your healthcare decisions, such as your doctor and family members. There are services for advance care directive storage too, like the U.S. Living Will Registry.
If you are a caregiver and organizing financial and legal paperwork for a loved one, AARP offers a helpful, comprehensive list of ideas and considerations here.
Step 3 – File Your Newly Organized Papers
Whether you decide to keep your papers in banker boxes or a filing cabinet, make sure they are in a safe, dry, and easily accessible location. Use whatever filing system works for you, but try to keep labeling simple, the same way you labeled your original stacks of paper.
Step 4 – Make Organization a Habit
Organizational experts recommend that you use separate boxes or baskets for paper documents that need attention:
- To do
- To pay
- To read
- To file
Get in the habit of emptying your “To file” basket each week to avoid falling back into the situation you started with!
“For every minute spent organizing, an hour is earned.”
– Benjamin Franklin
The satisfaction and peace of mind associated with keeping good, well-organized records can’t be underestimated. That bulging filing cabinet may seem like an insurmountable foe, but approaching organization with good humor and determination will help you make it through.