What Documents to Keep, and What to Shred

As I have mentioned before, Tim and I have moved 8 times in the almost 11 years that we have been married. Each time we move, it seems that we have stacks and stacks of papers to go through and make decisions on: are these important enough to pack up and move, or can they be discarded now? And if they can be discarded, how do I know what to shred?

Moving time is always a great time to review your papers and see if you can cull them a bit, but even if you aren’t moving, we’re fast approaching the “spring cleaning” time of year, and I want to encourage you to make this your year to tackle your paper demons. You can do it! Here’s my pile that I’ll be sorting through this spring (and hopefully getting rid of 50% or more!):

If you often find yourself unsure of the things you should keep, here’s a basic list:

Tax Returns

Keep your annual tax returns for…well…forever. That’s the bad news for those of you who want a paper-free lifestyle.

But here’s the good news related to taxes…you can get rid of all the supporting documentation for your taxes after just 3 years (something I just learned and am SO excited to know)! That’s how long the IRS has to state that they would like to audit you.  If that makes you a little nervous, it is true that the IRS can audit you after up to 7 years if they suspect that your income has been under-reported by 25% or more. And they can audit you at any point in time if you have committed fraud or just never filed your taxes. I’m assuming that you haven’t done any of those things when I state the 3 year rule, here. 😉

Property Purchase/Lease Documents

If you have purchased a house, you need to hold on to all the paperwork related to the purchase and keep it in a safe place. If you have rented a place, most definitely hang on to your rental agreement. We once moved into a place and had the landlord call us to tell us that our very first month of rent was late. Thankfully he was a very nice man. But I was also able to pull out our rental agreement to show him the address I sent the payment to…turns out it was an outdated address. He apologized for that oversight, and we got everything straightened out. So you never know when you might have to refer to it!

Medical Documents

It is a good idea to keep any medical records that you have for yourself or family members.

Certain Certificates

Birth certificates, death certificates, marriage certificates and social security cards should all be kept in a safe place, such as a fire-proof safe.

Now for the fun part: What to Shred!

Bills

You definitely need to cross check your bank statements and credit card bills with your own records of expenses (oh how many times I have found problematic charges on my credit card….such a shame). But after you have checked through everything and paid your bill, you can shred ’em!

I do think there is something to be said for being able to estimate your monthly utility bills. I am able to do this by looking at our budget that we keep in a fancy excel spreadsheet and where we record our expenses every month. If you are moving to a new place or trying to sell your current one, that’s a good thing to know about your residence. So if you don’t keep your own records, perhaps you should hold on to your utility bills for a year to get a sense for how expensive your home is to maintain throughout the year. But no more than 1 year, people!

Receipts

If the receipts aren’t for anything that you will be returning or that you will be claiming on your taxes, then set them free!

Papers from School

I think it is a great idea to keep a few pieces of art from your children, but there is really no need to keep every single thing that crosses your threshold. I can tell you as an adult that I’m not interested in having a huge box of school papers from my elementary school years. A very small box will do just fine, thank you very much! If you have a tough time letting go of some of the things out of guilt, I encourage you to snap a photo of the pieces. That way you have them forever! Tim and I recently took pictures of some clay art that he did as a child, and that his mother so lovingly saved for him. I really enjoyed getting to see them, and so did Tim. But after a few weeks he realized that he had no desire to actually keep them. So we snapped photos, and let them go.

Now, obviously, clay creations and other works of art don’t need to go into the shredder. But if you have paperwork about your children that includes any sensitive information (address, phone number, social security number) then those need to be shredded. Children are victims of identity theft, too!

I hope this gives you a good idea of where to get started if you are hoping to move with less paper clutter this year, or to just get your current home to be a bit more organized and less junked up with paper!  Get to it!

A word of caution: PLEASE do not skip past the shredding part of this exercise. It is possible that nobody will go through your garbage, and find your personal information and commit identity theft. But it is also possible that they will. After all, identity theft is a lucrative business, and well worth taking a peak through your trash for many people. If you have a garbage bag full of shredded documents, would-be thieves will have nothing to search for, and that’s a very good thing.