Organizing paperwork is a constant struggle for me and for most of the folks I work with as well. I’ve tried lots of approaches to filing over the years, and I have learned different types of papers require different systems to keep on top of everything. There are four distinct categories and each one needs to be stored and processed differently. This may sound complicated, but it’s pretty simple once you get the hang of it. Here’s how to handle the four important types of paperwork: 1. Active / in process paperwork – The first category of paperwork is the stuff that requires action or is going to be needed in the very near future. This includes bills to be paid, cards to be sent, or tickets to an upcoming event. The key is to not lose track of these items! I keep an open desk tray in a prominent spot for the paperwork that I have to take action on because if it’s out of sight I will forget about it. I also keep a separate folder for items related to upcoming events. You can read more about this approach here. 2. Short-term paperwork – Most of the paperwork we deal with needs to be kept only a short period of time. Receipts, bank statements, credit card statements, and cancelled checks might have to be referenced a month or two from now, but probably not beyond that. I keep these items in twelve monthly folders that I purge at the start of each new month. For all the details on this system, click here. 3. Long-term paperwork – Some papers need to be kept longer, like home improvement records, insurance policies, receipts for large purchases, and product manuals/guarantees. Keeping these in a categorized filing system works best for me, and here are some ideas for setting up one of your own. 4. Keep forever – The smallest category of paperwork is the stuff that needs to be kept forever. These documents are usually issued by a lawyer or the government and they would be somewhat difficult to replace. Social security cards, passports, birth certificates, military records, divorce papers, deeds, and wills are all examples of forever filing items. These should be kept in a fireproof file box or safety deposit box for the most secure storage. Here’s a helpful reference sheet for how long to keep paperwork. It’s important to remember everyone’s situation is a little bit different and this post is simply a guideline. Consult your tax preparer to determine how long you should keep things for your specific situation.
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