What Financial Papers to Keep

Posted by suevenman on Feb 18, 2013  

Paper Tip #1:
What Financial Papers to Keep

Too much paper

Conquer Your Paper Overwhelm

About this time every year (this time meaning tax season) I like to run a series on dealing with paper. For most of us, the amount of paper we handle on a day to day basis far exceeds our ability to manage it. It is, by far, the biggest issue faced by Breathing Space clients and readers. So trust me, you’re not alone if you feel as though you’re about to be buried by a mountain of paper.

Often I hear from clients some version of, “I have an attic full of old checks and financial papers. How long do I have to keep them?” Here’s the low-down on what financial papers to keep and what you can safely shred. Caveat: I’m not an accountant; so if you have special circumstances, please check with a Certified Public Accountant.

  • Tax returns and supporting documents: 7 years.
  • Check registers and canceled checks: 1 year, unless tax related.
  • Deposit/ATM/debit slips: Discard after reviewing monthly statement, unless tax related.
  • Bank statements: One month, or long enough to check that all transactions are accurate; unless the statement is your only record of a tax related transaction.
  • Credit card receipts: Discard after reviewing monthly statement, unless tax related.
  • Credit card statements: Shred as soon as you check the accuracy of the statement, unless tax related.
  • Investment statements: Keep end of year summaries 7 years after you close the account; discard monthly or quarterly statements when you receive end of year summary.
  • Investment buy/sale confirmations and purchase records: 7 years after sale of security
  • Pay Stubs: Until you receive your W-2
  • Stock & bond certificates: Keep in safe deposit box as long as you own the security
  • W-2’s: Until you begin claiming Social Security. W-2’s are a great way to estimate earnings and entitlements

With on-line banking, it’s important to check how long statements and check images will be available to you. Make hard copies or save them as documents if necessary.

Some of you will breathe a sigh of relief, because this is exactly what you’ve been doing. But I expect many of you will find that you’ve saved far more paper than you need. But don’t try to pare down the whole pile at once. Instead, grab a box of old paperwork, a shredder and an old movie (Jimmy Stewart anyone?) and deal with one box, or even one handful at a time. Use the skills you’ve learned here to stay on track: get an accountability buddy and make sorting appointments with yourself. Set a target date for finishing and then work backward to see how many boxes you need to tackle each week. And finally, remember to breathe!

Happy shredding! 

Bonus question: What papers pose the biggest sorting challenge for you? Reply to this post with your answer and I’ll try to address it in a future post!

Next time: What medical and personal papers you need to keep.


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