What should I do with my paper financial documents?

Question

Lets face it, we're all going to run out of room at some point, I'm certainly in that category. I've got far too much paperwork

I have a whole cabinet full of old paperwork, such as:

1. Monthly bank statements
2. Credit card statements
3. General correspondence with bank
4. Car insurance paperwork
5. Guarantees on electrical items
6. Store receipts (things like iPhone, mountain bikes etc)

I'm thinking of scanning most of the above in, and then destroying the paper copies. I would probably keep receipts and have a 6 month cycle on bank statements

I'm also thinking to upload items to my Google Documents account, I'm quite fond of this service and not having to worry about backing up my own paperwork, but not sure its safe for financial documents, i.e. do they sniff around?

What do you do with your monthly statements? What are the best recommendations?

Answer 1

Regarding your specific types:

1. Monthly bank statements - Keep these at least as long as needed to reconcile your bank account. Recommend at least a year; keep the ones that have tax information on them (accrued interest and the like). Consider eStatements from your bank.
2. Credit card statements - Hold onto for seven years if they contain tax-related information. Hold onto them at least as long as needed for records in case a dispute happens with the merchant. Consider eStatements from your credit card issuer.
3. General correspondence with bank - How much do you have? This sounds like it's worth keeping. The bank will remember everything it says to you; you should do likewise.
4. Car insurance paperwork - Keep until you dispose of the car, or until any open claims against your insurance are resolved.
5. Guarantees on electrical items - Keep until you dispose of the item unless the guarantee has other information you'll need to contact the manufacturer.
6. Store receipts - Pick and choose the important ones. Keep anything that could potentially be used for business expense, charitable deduction, flexible spending account qualifying expense, etc. (i.e. tax-related). Keep others only as long as you need to reconcile your bank account.

If you can't part with anything, sure, scan them.

Also, there are lots of opportunities to sign up for eStatements with just about any financial provider. They want you to sign up for them, because it reduces their expenses.

If you still like having paper around (I do admit that it's comforting in a way) then you can usually prune your paper a bit by statement (getting rid of T&C boilerplate, advertisements, etc.) or by consolidation (toss monthly when the quarterly consolidation statement arrives; toss the quarterly when the yearly arrives).

Answer 2

Here's my approach:

• I still get paper statements for almost everything.
• I shred all billing statements as I pay them.
• I download copies of bank/credit card statements with tax-related transactions OR warranty implications. I file multiple copies on my computer, so if I buy a new TV and donate $100 in the same month, I file it under "warranty" and under "2010 Tax Docs"
• I scan and file receipts on the PC, because many receipts (thermal or line printer) will fade or degrade after a couple of years.
• I keep contracts that matter (ie. insurance, home improvement, cell phone) on paper and electronically for as long as I do business with that provider, plus a couple of years. For example, my health insurance carrier has revised my policy 13 times in the last 10 years, and I have all of those amendments. That saved my butt when I had back surgery and the insurance company tried to disapprove some expenses.
• I file paper documents that go with tax returns (W-2, 1099's, school tax bills, etc) with the returns and keep for 7+ years. I'm still holding 2000 tax documents because of capital losses that I'm still carrying over from the .com crash!
• I keep correspondence or anything significant that I sign forever.
• I keep the paper documents in a $40 fireproof chest and clean it out every tax season. I've been doing this for about 10 years, and the chest is about half full. The electronic stuff gets backed up to Carbonite.

As for Google Docs, I think that its safe enough for most people. If you in a profession that was subject to heavy regulatory scrutiny, of if you are cheating on your taxes, I would probably not use a cloud provider. Many providers will provide documents to government agencies without a subpoena or notice to you.

Answer 3

I won't add to the timelines, as I agree or don't care but my two cents are

• if you get paperless statements, don't forget to downloads those and save them somewhere. I don't print mine unless they are important like a statement with a disputed charge.
• Keep your more important documents in a fireproof safe. Deeds, titles, loan docs, insurance declaration pages and other binding agreements you have signed should be in a safe. Statements are just keep in a plastic file folder box.