Last week I talked about setting up Action Files. These are the files which hold papers with which you will do something. You might file them, read them, respond to them, keep them available for easy reference. Whatever you do with these papers once you take action they leave the Action File holder and go …
That’s just it. Where do they go? Which papers do you keep? Those which you know you are over and done with get rid of right away otherwise they will just add to the pile and you will need to look at them once again. Only to find out that you didn’t need to bother. Will you need to look at them again (reference them)? Are they papers to keep but not to refer to? Will they help you with your taxes? How will you find them, if you need the information?
These are all questions I am asked by my clients.
If you are technologically inclined many papers can be scanned and saved in secure password protected folders in the clouds. These folders will still need to be organized and labeled appropriately so that you don’t waste time searching endless saved files. This will enable you to have access to this information from any computer provided you have the password!
Now, back to the papers.
I often get asked how to organize the files. My advice is to organize them in a way that makes sense to you. Some people like to file alphabetically, some by category, and some like to mix it up. There is no right way to file your papers. The important concept is that you are able to find what you’re looking for when you need it.
Organizing supplies to have on hand:
Manila folders, hanging files, a marker, and plastic tabs and/or a scanner
Label the Hanging file and the manila folder so that you will know exactly where to return the manila folder when you remove it from the file drawer.
Here are some basic categories:
- Let’s start with personal papers. I call these Vital Documents. These are papers which serve to prove your identity. You keep them forever. I advise keeping a copy at home in your file cabinet and the original in the bank. For the technologically inclined – scan these documents and keep them together in a folder in the cloud. Label them with something that will prompt you to remember the type documents the folder contains. Keep the original in a safe deposit box at the bank.
Here’s a short list, you may think of others:
Birth Certificate, Passport, Baptismal records, Marriage license, Divorce decree, Citizenship papers, Military records, Social Security numbers
2. Finances:
Keep the year end financial statements for 7 – 10 years in an archival box (or scanned to the cloud)
- Keep the current year in an easy to reference file in your file drawer. You may have more than one file depending on how many accounts you have. Be sure to include any investment accounts, checking and savings, credit card information, any loan information, and retirement accounts. You might file these by category and then alphabetize the folders within the category. Just a thought!
3. Insurance:
- Sometimes the insurance is bundled. You may have one policy which covers a multitude of things. Be sure to keep the original policy and then add the updated rider when it comes in each year. Remember to remove and shred the past year’s rider so the file doesn’t contain stale information.
4. House:
- List any service providers – name and contact informationAlso keep receipts for any expensive furniture or appliances or machinery – like a new HVAC unit.
Keep receipts for home improvements and repairs (make a copy of this for your tax file – some may be tax deductible)
- Keep an inventory of all your household furnishings and belongings here. (more about this next week)
5. Taxes:
- Keep tax returns forever in an archival box. Keep the supporting documents in an archival box for 7 – 10 years.
- Keep a folder in an easy to access file drawer labeled with the current year. Put any tax related information into it as it comes into your house. This way when it comes time to doing your taxes you have only to look in the one place.
This is just a few categories of files. You will probably have more as you continue sorting through your papers. If, when you were sorting, you created a pending or marinating file please remember to go back and take another look at those papers. As time has passed you may have figured out what your next step with those papers should be.
Let me know how your paper sorting is going and if this was helpful. I hope it was!