Everyone wants a fresh start in 2017 – to sweep out the old and tackle the new. If I know you guys, you’re getting started off right with a good, thorough housecleaning. And I bet, like mine, your housecleaning will end with a big stack of financial papers you have no idea what to do with.
Figuring out which papers to keep and which to get rid of can be maddening. And if you’ve ever learned the hard way what happens when you throw out an important document, you probably err on the side of keeping too much. Hopefully I can help with that.
Here are some guidelines to help streamline your mess. Just remember to shred any documents with sensitive information before you toss them so they don’t end up in the hands of identity thieves.
• Credit card receipts and statements. Save your receipts until you check them against your statement for discrepancies, then toss them. Hang onto statements for one year. If you need to access information on statements from more than a year ago, you should be able to do so electronically, according to CreditCards.com.
• Paid utility bills. Write the date, the amount paid and the check or confirmation number on each bill and keep it for one year.
• Pay stubs. Keep your pay stubs all year long, then check them against your W-2 tax form. If everything squares up, you can shred them. The W-2s, however, should be stashed away forever, according to the Social Security Administration.
• Purchase receipts. Throw out grocery receipts after the food has been eaten. Let go of receipts for shoes and clothes you’ve worn, since you probably won’t be able to return them anyway. Keep receipts for big-ticket items like jewelry and home-improvement projects for insurance purposes. Keep receipts for anything that comes with a warranty or guarantee and keep them with that paperwork. Hang onto both for the life of the contract.
• Statements for savings and retirement plans. Keep the statements you receive each quarter, then compare them to your annual summary to make sure everything matches up. If it does, toss the quarterly statements and hang onto the annual summaries indefinitely.
• Insurance policies. Keep them while the policy is in force, then toss them once the renewals come in.
• Medical bills. Consumer advocate agency Public Citizen suggests keeping them for up to 10 years after treatment has ended. Medical billing mistakes are common, and with so many people being billed at once, it can take a while for discrepancies to be discovered. If someone makes an error and sticks you with an inflated or duplicate bill, you’ll want to be able to prove the mistake.
• Loan, lease and installment plan payments. While you’re making payments, save each individual bill until you get your quarterly or annual statement and can match them up against each other to make sure everything has been recorded accurately. Every time you get a statement, you can toss the bills that led up to it. Save all of the statements until you’re paid off. At that point, keep the “paid in full” receipt and ditch the rest of the statements.
• Tax records. Keep them forever. If the IRS accuses you of filing a fraudulent claim, there’s no seven-year look-back limit.