Did you know . . .
80 % of the papers we file, we never refer to again. The Small Business Administration
A full four-drawer file cabinet holds 18,000 pages. NAPO
The last task in the paperwork management system is purging the archives – thereby creating room for what you DO need to keep, and hopefully making it easier to find what you need when you need it. If it’s been a while since you’ve purged files, the process will take a little longer. The goal, of course, is to purge archives regularly, generally once a year. I purge archives as I gather information to file taxes each year.
One-of-a-Kind Documents – review annually. Copy and file the contents of your wallet again. Replace anything that’s become outdated; transfer anything that needs to follow its owner into a new household. Most items will stay indefinitely.
Taxes – Consult your accountant for more specific guidelines, but the rule of thumb is to keep tax returns for 7 years and supporting tax documents for 3 years.
Money – keep originating paperwork in your active file, file the current year documents with the current year tax records.
Medical – keep medical history documents and enrollment documentation. File current Explanation of benefit documents, invoices, and payment information with the matching tax year documents.
Auto – discard expired insurance verification and registration documents; note expiration dates on warranties and service agreements; group current year repair and maintenance documents (I use a binder clip or paperclip and leave in the folder.
Insurance – keep originating paperwork and current documentation of changes to your policy. Paid invoices can be grouped and filed with taxes or discarded.
Banking & Investments – keep originating paperwork, pull tax documents to file with the current tax year in archives. Regular statements can be discarded or stored with taxes.
Misc. – review files. Discard what is no longer applicable.
Reference Material – flip through your stored reference materials to see if any has become obsolete.
Calendars and Journals – if you keep these, purge obsolete copies with the rest of the archives.
Resumes – even if you have no plans to change jobs, update your resume at least once per year.
Some minimalists will see that this system keeps more paper than absolutely necessary, but if you’re trying to overcome the habit of storing everything this will be a good place to start. Please, please, be sure to ask your accountant or financial advisor if you have any questions about what to keep and for how long.