8 Steps to Declutter Your Financial Paperwork
Is your filing cabinet overflowing? Is your desk buried under a mountain of paper? Getting your financial paperwork under control will help you from never missing an important bill or correspondence. And finding what you need quickly, will eliminate everyday stress. So get ready, here are 8 steps to create a filing system that reduces paper clutter:
1) Store paperwork in one central location. If documents are spread throughout your house, it’s easy to lose track of important billing notices and accidentally accrue late fees.
2) Divide and conquer. Organize your filing system by placing documents not yet filed into these three categories:
• Bills to pay: Assuming you get paid twice a month, divide into two piles – invoices to be paid on the 15th and the 30th. If you budget for the entire month, pay every item in this stack immediately. Eliminate future paper waste by setting up automatic bill pay.
• Follow-up items: This pile should include financial documents that need a bit more attention like a medical bill or credit card statement. If you need additional time to review, set an auto-notification to your calendar as a reminder.
• Monthly files: Most billing statements should go in this pile. To save file space, organize these files by month rather than by bill collector. When you need to refer to an item simply look in the corresponding month’s folder. Once you no longer need that month’s document then shred it.
3) Create separate files for important documents such as life insurance, warranties, medical statements or taxes – and save as long as they are relevant. With tax season upon us now may be a good time to discard older tax records. Here’s how long you should hold onto them based on IRS recommendations.
4) Store official records in a safe deposit box like legal documents, savings bonds, birth certificates or diplomas. These documents should be saved indefinitely.
5) Shred old paperwork. Clearing your home of old, financial documents is a great feeling but don’t scrap them with your weekly trash collection. Your paperwork may contain personal information you don’t want to have exposed where fraudsters can steal your identity. Your best bet is to shred any documents that contain sensitive information before tossing them.
6) Build a digital file cabinet. Scan and save receipts the moment you get them. Once they’re saved, discard the paper.
7) Set up rules to pay right away. Implement an “if this then that” rule and stick with it: if a bill comes in then pay it right away, or If a document requires a signature, then sign it immediately. This will help to avoid procrastination.
8) Enroll in electronic statements. Some companies offer incentives for subscribing to paperless billing. NIHFCU members can eliminate the paper statement fee by switching to e-statements which are more secure and delivers faster than paper. Switching is easy and can be set up by logging into online banking.
Resource: livingwellspendingless.com
