I’m a very organized person. That’s true with everything, even papers such as manuals, receipts and warranties. I was just always afraid to throw those items away. There have been times when I was glad I saved them. It saved us money!
A while back, I noticed our faucet was leaking. My husband and I couldn’t believe it because the faucet was less than a year old! Rather than running out and buying a new faucet, we did some research to see if we could replace the broken part instead. I was able to find it for $50 (much less than the cost to replace the faucet). However, just as I was ready to click the button to buy, I noticed that there was a link to warranty information.
I clicked over and read, and sure enough – our faucet was under warranty! The kicker was the receipt. We had to be able to show proof of the date of purchase. I went looking and ended up finding just that! We were able to call and order the replacement part at absolutely no cost to us.
We have had this happen in other situations as well. We had a freezer stop working. The compressor went out. The same thing happened with this: It was still under warranty. I had the receipt and paperwork available to prove this to the company, and they replaced our $400 freezer – for free!
In those moments, I was glad I had been so diligent about saving our paperwork. Doing so can also potentially save you money. If you’re not sure how or what to save, here are some ideas.
HOW TO ORGANIZE IMPORTANT DOCUMENTS
- File box
We use this method to keep all of our documents (you can find the style of box HERE). I have several of these boxes with hanging file folders inside them. The folders are labeled, so I can track down what I need. The categories depend on what you need. Here the ones we use:
- File drawer
If you don’t have very many of these papers, you could easily find a file cabinet or desk drawer in which to store them. It is still best to keep them organized by category, so you can see what you need when you need it.
I tried this filing system, and it didn’t work for me (you can read about that here). It does work for many people and might be the best option for you. If you do decide to go with this method, I would recommend that you purchase high-quality, STURDY plastic sleeves for your items (I think that is where I went wrong). You should still divide the papers by category, so you can find them when you need to.
You can make a digital copy of items via a Neat Mobile Scanner or the scanner on your printer. Then create a file folder on your computer and organize files accordingly. For example, create a folder called Home Items. Under that heading, make additional folders called Electronics, Appliances, etc.
- Safe deposit box
Certain important papers, such as your birth certificate, marriage certificate, social security card and life insurance policy, belong in a safe deposit box at a bank or a lockable fireproof safe at home. (If you put life insurance policies in a safe deposit box, keep copies at home with your other financial documents.)
HOW LONG TO KEEP DOCUMENTS
It’s one thing to know how to store your important papers and documents. But how long do you need to hang onto them?
- Tax returns
Hang onto your tax returns for seven years. This includes all receipts and additional documentation. When you file your latest income tax return, find the oldest and toss it. That way, you always have just seven years’ worth of tax returns.
For example, when you file your 2020 tax return, track down any returns from 2013 and before. Shred these tax documents to prevent identity theft (don’t just toss them into the trash or recycling). You can find a shredder for about $40 on Amazon.
If you have a unique situation, such as a business or a complicated return, you may need to retain these papers for a longer period. You may want to consult with your CPA.
- Owners manuals
There’s no need to keep and organize manuals anymore because most of them are available online. I will admit that I still have some filed, and I like to pull them out and read them when needed. But again, you can toss these.
You should always keep these along with your receipt (stapled together) for the length of the warranty period. By doing this, you will quickly find the details about your warranty as well as have the documentation you need.
Most store receipts are valid for returns for up to 90 days. For big-ticket items, it’s always good to keep the receipts and attach them to the warranties (as mentioned in #3 above).
- Bank statements
There’s no need to save each monthly bank statement as long as you have access to your statements online. If your bank doesn’t offer this feature, it’s only necessary to keep statements for one month. As you reconcile your account, toss out (actually shred) the prior month’s statement.
- Bills / Credit card statements
If you use these to keep track of payments, you should keep them only until the next month’s bill arrives and you confirm your payment was applied. These should always be shredded or destroyed. We don’t keep any of these, and we shred all of them. However, we do scan in those needed for tax purposes, so we have them as documentation.
- Tax records
As you go through the year, there are things you know you’ll need for your taxes. Rather than putting them where you have to go digging at the end of the year, you could instead put them all into one folder. Place your receipts and similar papers in a single folder all year long. At tax time, everything you need is in one place. No digging or research is necessary.
- Medical receipts / Insurance paperwork
These items should be saved through the end of each calendar year, in case you need to check payments to show deductibles, additional claims, etc. If you include anything from the paperwork on your taxes, save those items with that year’s taxes. If any items are associated with worker’s comp, you should contact your attorney or CPA about the length of time to keep those records.
- Pay stubs
Keep one year’s worth of stubs. If you need to show proof of income, most companies will not require anything further back than this period.
To ensure you purge items you no longer need (warranties that have lapsed, etc.), be sure to go through your files at least once a year. The easiest time to do this is when you are filing away a copy of your most recent tax return. You are already looking at your files to do this, so you just take a little more time and clear out those old items you no longer need.