Managing Your Financial Documents: What to Keep and What to Toss

Are you drowning in a sea of bank statements, tax bills, and financial documents? Managing your overflowing paper trail can seem like an impossible task but fear not – help is at hand. As a financial advisor with Financial Life Planning, LLC, I understand the importance of keeping your financial records organized. In this blog post, I will provide you with suggestions on which documents to retain and which ones can be safely disposed of. Additionally, I’ll offer tips on how to manage your paper clutter and provide valuable insights on transitioning to electronic statements and online bill payments.

Sorting Through the Paperwork

When it comes to managing your financial documents, it's essential to know what to keep and what to toss. Keeping your records organized not only helps you stay on top of your finances but also ensures that you have the necessary documentation in case of audits, disputes, or when planning for the future.

What to Keep Forever

• Birth Certificates, Marriage Certificates, Divorce Decrees, and Adoption Papers
• Social Security Cards and records
• Passports and Citizenship papers
• Estate Planning documents (Wills, Trusts, Powers of Attorney, etc.) Note: should be periodically reviewed for potential for both personal, and Federal / State Tax Law changes
• Pension Plan documents and Retirement Account records
• Real Estate Deeds and Mortgage documents
• Vehicle Titles and Lease Contracts

What to Keep for a Limited Time

• Bank and Investment Statements (keep for at least three years; note see managing your paper below)
• Insurance Policies (keep for as long as they are valid)
• Receipts for major purchases (keep at least as long as product is still under warranty)
• Loan Agreements and repayment records (keep until the loan is paid off)

What to Toss

• ATM Receipts and Deposit Slips (once reconciled with bank statements)
• Pay Stubs (once reconciled with W-2 forms)
• Expired Warranties and Insurance documents
• Utility Bills (once paid and not needed for tax purposes)
• Credit Card Statements (once reconciled with receipts and paid)
• Shredding vs. Tossing: Any document containing sensitive personal or financial information, such as account numbers, should be shredded before disposal. This includes old credit cards, insurance cards, and pre-approved credit card offers.

Managing Your Paper

Now that you have a better understanding of which documents to keep and which ones to toss, it's important to consider how to manage your paper clutter effectively.

• Switch to Online Bill Payments: Opt for electronic bill payments to reduce the influx of paper bills and statements.
• Sign Up for Electronic Bank and Investment Statements: Many financial institutions offer the option to receive current and download historic statements electronically, reducing the need for paper statements.
• Organize Digitally: Consider scanning important documents and storing them securely on your computer or in the cloud. This ensures easy access and reduces physical clutter.

Conclusion

In conclusion, organizing your financial documents is a crucial part of maintaining your financial health. By knowing what to keep and what to toss, as well as embracing digital alternatives, you can streamline your financial record-keeping process and reduce paper clutter. However, if you find yourself overwhelmed or have complex financial situations, it's always beneficial to seek the guidance of a financial professional.

If you need assistance with organizing your financial documents or have any other financial concerns, don't hesitate to contact Financial Life Planning, LLC. We offer a free consultation to help you get started on the path to financial organization and success.

Remember, managing your financial documents doesn't have to be daunting – with the right knowledge and support, you can take control of your financial future.

Contact Financial Life Planning, LLC today for a free consultation and take the first step towards financial peace of mind.

Edward C. Goldstein, CFP®, MBA, President
CERTIFIED FINANCIAL PLANNER ™ Practitioner 
Financial Life Planning, LLC
10,000 Lincoln Dr. East, Suite 201
Marlton, NJ  08053
Phone: 856-988-5480
Fax: 908-292-1040