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Paperwork! Cha-Ching (Banking and Investments, Part 1)

Banks and Financial institutions send an enormous amount of paper to your mailbox over the course of a year. And, if you’ve kept them all for several years you have an enormous amount of paper to prove it. Banking institutions send monthly or quarterly statements, tax documents, fee change documents, and more. Investment firms add prospectus booklets, voting documents, and account performance reports. You need to know what to keep, right?

If you can comfortably switch to paperless statements, this is the best place to start. Most institutions allow the option of sending paper statements for certain types of documents if it makes you uncomfortable to do away with paper altogether. Of course, if you’ve penned your username and password on the folder of originating documents, you’ll have access to all your account information all the time.

If paper is your jam (get it – paper jam) keep statements as supporting tax documents for three years. File them away with your taxes each year. Keep the current year statements in a folder with the originating account documents. Even supporting tax documents need only be kept for three years.

If you don’t vote for board members, if you don’t read the prospectus, or if you don’t pour over the performance reports, these documents can be discarded immediately. In a perfect world you’d vote, read, and understand all of it – but the world isn’t a perfect place. Regardless of your comfort level with this type of information, you can discard all but the most current documents. If you trust your financial advisors and they are maintaining regular contact with you about your accounts, you should be fine. If you don’t understand something, ask them.

When we move our focus to purging stored paper most of it will be banking/investment related – and most of it will be destined for the shredder. Shredding documents might be classified as a business expense, but for personal paperwork the cost can be prohibitive. Check social media for free shredding events when the time comes or be prepared to burn through several cheap shredders to get the job done.

Next time we will starting building subcategories for your banking and investment documents.

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