Organizing Your Financial Paperwork

As we approach the end of the year, the idea of cleaning things up and clearing things out may be on our minds. This might be a good time to put some organization to the paperwork around the home. People tend to be in two camps when it comes to paperwork – Pack Rats who keep way too much (I’m in that category) or the Purger who throws everything out and doesn’t keep things that should be kept.

When it comes to financial paperwork, the main reasons to keep things are:

  1. For return/warranty purposes
  2. For tax substantiation purposes
  3. For sentimental reasons

Image of filing cabinet with floppy disks on topA problem with organization is that items get put aside or are squirreled away in many locations. Organization means keeping these in one central location (and not in the dark basement or attic where you don’t ever want to visit the paperwork!). Try to touch things only once or twice. For example, if a bill comes in the mail, pay it right away (one touch) or put it with other bills that get paid once a week or once every other week (two touches).

Let’s take a deeper dive on these three categories of paperwork.


For items that you might want to return, hang onto the original sales slip (or associated email if you get these in your inbox) for the return period which might be anywhere from 10 days to 30 or 90 days. After that period throw it out unless you need it for warranty purposes.

If you do need to keep the sales slip for warranty purposes, I suggest creating a file folder to hold these. For each slip, write on it the date when the warranty period will expire (from 90 days to several years). Then put the slip into the folder. Once a year, go through the folder and throw out any sales slip that has a date on it that has passed.

For Tax Substantiation

The IRS can look back for up to 7 years to audit your tax returns. An audit usually entails justification of items on your tax return. Thus, you’ll want to keep the paperwork that you or your tax professional used to prepare the returns. One simple way to keep everything together is when you get your tax return completed and printed, put it into a file folder along with all of the documentation for that year’s return. After 7 years, you can throw away the folder although experts recommend keeping the return itself.

I’ve documented in more detail how long to keep various records in my newsletter and I will be doing a blog entry in the future on this topic as well.

For Sentimental Reasons

While you may have sentimental value for some things, it isn’t likely that you are keeping around financial records for that reason. I may be a little different, but I have kept my parent’s accounting books that they kept over the years. For me, it is interesting to go back and see how much they spent on groceries or electricity in 1960 or 1970. It reminds me of them and life growing up.

As a professional organizer pointed out, the reasons we keep things around are often not related to the object at all. It may be an experience or a memory that is associated with the item and not the item itself. If you do keep sentimental paperwork around, consider why you are doing that – what is associated with the paperwork? There may even be a fear behind it – what if I throw something out and I need it later?

For the sentimentalist, consider that the paperwork itself isn’t sentimental, so it doesn’t have to stay in a paper format. Instead consider scanning it and keeping it in electronic form and getting rid of the paper itself. The point is to consolidate and reduce the physical footprint of that paperwork.

The Packrat and the Purger

If you are a pack rat that has paperwork all over the place and feels overwhelmed by the thought of trying to corral it into order, contact us at Triad Personal Paperwork Services to help you bring it under control. If it is more general (non-financial) organization you need, there are professional organizers who can help and we’ll be happy to refer you to one of them.

If you are the purging type who throws it all away, we can help set up some easy-to-follow organization methods for your financial paperwork to help keep only what you need and to purge the rest.

In either case, you’ll feel better for taking some action on the things that have been sitting around that you wanted to get to sometime. The end-of-year can be a great time to work on this.