Spring Cleaning, Do I Really Need to Keep That?

By: Brittany Komorowski, CFP ®, EA

Liberty Financial Group, INC. www.lfgwi.com

With the snow quickly melting and the warm weather fast approaching (hopefully), the spring-cleaning attitude seems to be in the air. You may be like me, inspired by the trending Marie Kondo style¹ or just simply sick of seeing the piles on piles of files. If you haven’t gone through your documents recently it may be time for a Spring refresh.

Once you start going through your files, I’m sure you’ll be inspired by the decreasing size of your stacks of documents.  Here’s a few tips to help you on your way.

Tax Documents- While you may have no desire to look at these documents again (or even in the first place), it is recommended you keep these documents for 7 years. Feel free to dispose of tax files from earlier years.

Investment Statements- Some of you love having a stack of reports to track the progress of your every investment dollar, but those that do not can get rid of many of these papers. I recommend keeping only the annual year end statement each year and the quarterly statement for the most recent year. That’s right, there is no need to keep each month’s statement unless your heart so desires.

Bank Statements & Paystubs- If you’re anything like me, you may get these and simply put them in a special place. Good news! You only need to keep these documents for one year. That’s right folks, it’s time to go clean out that folder or drawer!

Medical Bills- Most of you only need to keep these for one year, in-case of billing disputes. But for those itemizers who might be eligible for this deduction when filing tax returns, I recommend asking your tax preparer if keeping these are necessary for your situation.

However, there are a few papers that you must keep permanently. They are: birth certificates, social security cards, pension plan documents, marriage license, any insurance policy, legal documents, loan documents, vehicle titles, and property deeds and mortgage or satisfaction of mortgage documents.

Now you may ask, what is the best way to securely dispose of my personal documents? I recommend a crosscut shredder. There are also places you can take your documents to pay to have them shredded for you. Another creative option I know my boyfriend enjoys is slipping a few into the campfire in summer. Whatever option you choose, feel proud of yourself for lightening your load and keeping clean organized records.