3 Steps to De-clutter Your Finances

BY MIKE SULLIVAN

Do you have boxes of old financial records crammed in the garage? Do you know how long you need to hang on to those pesky receipts? Personal financial management comes with a torrent of paperwork. However, there are tools and resources that enable you to avoid a massive paper trail and maintain better control of your finances.

Maximize online banking

During the past decade, online banking has changed the way we manage our daily finances. Most of us use it in some fashion, but many don’t maximize the services offered. If you already track your expenses online, consider opting out of paper statements, bills and communications. Since electronic delivery actually saves the bank money, some even offer customer incentives, and many service providers, such as utility and cable companies, offer options for electronic delivery of bills.

Next, find out if your bank offers automatic bill paying services and sign up to have payments automatically drafted from your accounts on their due dates. This service reduces paperwork, saves postage, and is beneficial for consumers who tend to forget payment deadlines.

Stop credit card and insurance offers

Did you know you can actually stop the stream of credit card and insurance offers that clutter your mailbox? In many cases this mail ends up directly in the trash or recycle bin. To opt out of offers for five years, call 1-888-5-OPT-OUT (1-888-567-8688) or visit www.optoutprescreen.com.

Clear out older financial records

Tax records, bank statements, receipts, home repair invoices—the list of financial paperwork can go on and on. You might wonder, “How long should I keep my records?” The following chart will help you determine when it’s time to recycle those old records.

Shredding the records

When you do dispose of your records, make sure to shred everything. Just be sure to shred all paperwork before throwing it in the trash bin. A-1 Shredding in Phoenix, Premier Document Shredding in Tempe, and Beacon Secure in Tucson are just a few of the many secure shredding facilities around the state that shred and recycle high volumes of confidential documents, primarily for businesses. If you shred documents at home, recycling it isn’t always as simple as walking out to your recycling bin—not all city curbside recycling programs take it. Shredding paper reduces it from high grade to medium grade, so it’s best to shred only documents for which white-out, dark ink or a pair of scissors can’t do the job (none will affect the recycling process), according to Earth911.com.

Mike Sullivan is the Director of Education for Take Charge America, is a non-profit organization based in Phoenix that provides financial education, credit counseling, debt management and housing counseling. To learn more, visit www.takechargeamerica.org.

 

 

Financial Record Timeline – When to Shred & Recycle

Document/Record                                   Timeline


Tax returns and supporting documents (W-2, 1099, proof of payment for credits/deductions, etc)…………………. 7 years 
House-related records…………………….. 10 years for home repairs/improvement records and proof of buying/selling a home.
Paycheck stubs………………………………. 1 year, confirm pay stub matches W-2 first.
Bank/credit card statements……………. 1 year, confirm payments correct first. Statements may be available online for a set time period.
Bills…………………………………………….. 30 to 45 days; confirm payment clears first.
Receipts……………………………………….. 30 days for daily purchases; confirm payment clears on statement first. Keep receipts for major purchases indefinitely, such as jewelry or laptops, for insurance purposes.
Credit card receipts…………………………. 30 to 45 days, confirm receipts and statement match before shredding.
Brokerage account statements………….. Indefinitely for annual statements (until you sell); 30 to 45 days for monthly statements. Statements may be available online for a set time period.
IRA contributions…………………………… Indefinitely for annual statements (as long as you have the account). Statements may be available online for a set time period.
Loan documentation……………………….. Indefinitely (until loan is paid off); Keep record of full payment permanently.

 

Chart provided by Take Charge America, Inc. 


 

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