Smart Girls Know: How to Declutter the Important Stuff

One of the seasonal rituals I really look forward to is the post-holiday decluttering binge (honestly!).  Perhaps not everyone goes through this so let me explain.  Once the New Year rolls around, I get to a point where I just can’t effing stand it anymore with the pine needles, the piles of cards, the unwashed dishes, and all those random things that tend to accumulate while I’m running all over the place.  When it hits, I have to take care of it ASAP or things are going to get snippy real quick.

Don’t get me wrong, I love Christmas and everything that comes along with it.  After New Year’s though, all the decorations and clutter feel like house guests that have overstayed their welcome.  You love them, but, you need to get back to your real life.  Down comes the tree, on goes the dishwasher, extra coffee cake is exiled to the office break room, and the recycling bin is filled before I know it.  This stuff is not new.  I’m not going to front like I’m the only one on earth who knows how to take down decorations.

However, one’s momentum seems to hit a stumbling block when you run into all that stuff you shoved in a drawer/basket/bag/box before party guests arrived.  That stuff you feel like you’re supposed to keep or else you’ll get in trouble.  That’s right, I’m talking about “papers.”  Doctor bills, bank statements, year-end summaries of your 401k… They’re the equivalent of those tags on pillows.  Do not remove under penalty of death.  Here are some of the guidelines I use to make sure I’m getting rid of the clutter while still maintaining the right records and not putting my privacy at risk:

Go Paperless:  I can’t say that enough and I think it’s probably a given for most people.  If an institution is offering you paperless options for your bills or statements, it’s likely that they have reviewed the necessary retention guidelines for that information and will keep it available online to you for at least that long.

Go Paperless Some More: All types of companies are looking to reduce postage costs and appear more green.  Take a look at the mail you are getting hard copy and see if they offer e-delivery.  I just discovered that my health insurance company offers e-delivery for the random statements I was getting that aren’t bills.  It’s a bit of a pain to take the time to enroll online but it will save you a stack of paper down the line and give you an online record to access in the future.  Set up an email folder for receipts and bills so they’re easier to find later.

Tax Documents: But what if I get audited?  I’m as scared of the IRS as the next girl.  It doesn’t mean that you need to hoard boxes of receipts and account statements.  The IRS website actually lays out their record keeping guidelines in a pretty straightforward manner here (shocker I know!) and this bankrate.com article distills it even further.  In general, the only documents that you need to worry about are those that you’re using to claim deductions on your tax return with.  However, electronic copies are as good as hard copies.  The only exception to that are receipts for business expenses.  Your bank statement will only show that you spent $100.  The receipt itemizes your purchases to reflect legitimate purchases.

If you do itemize, save your receipts however makes sense to you.  In a binder taped to pieces of paper, in a file organizer, or, if you’re very slick, scan or photograph them onto your computer and keep a spreadsheet to track your totals. Fancy!  Chances are, if your itemizing, your using an accountant so ask them for guidance.

Privacy: Now, you’re probably still looking at that pile of papers on the coffee table wondering what to do.  First, pay the bills by credit/debit card so the payments show up on your statements and you have a record.  Then recycle or shred.  Shred anything that contains information you wouldn’t put on facebook.  Social security numbers, account numbers, insurance IDs, etc. Recycle the rest.  Save anything that you can’t access online but would need to use for your tax return or to clear up a potential credit score issue. You should also keep your last statements for 401k plans from former employers to facilitate rolling them over.  I usually end up with about a file folder’s worth of records each year that I stick in a file box in the closet.  Depending on your situation, you should keep these records for 3-6 years.

Obviously, I’m not a professional.  These are just some guidelines that I’ve found helpful and you should consult a pro before making any big changes. This is a big topic and I know I didn’t cover everything.  What kinds of papers do you never know what to do with?  Any good organizational tips that serve you well?  We’ll be talking more about taxes, finances, and all the other nitty gritty stuff in the coming weeks.  What would you like to hear more about?

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