I loved reading everyone’s questions from the giveaway post. Debbie asked what papers, receipts, bills should she keep and for how long. And then she wanted to know what to do with all those papers.

Bank Rate has a great article on how long you need to keep certain papers:

What financial records to keep

I use the Freedom Filer System myself for keeping things organized. I’ve been using it about 2 years now and I never have a stack of things to file now, since filing is so easy. It is a self purging system. Your file system is divided by:

Green folders: Monthly files

  • receipts you get
  • little papers you don’t know what to do with
  • bank statements
  • paid bills

There are 2 years of files with the current year up front. A binder clip can keep your place. So at the beginning of each month you can empty out the folder which would have papers from 2 years ago – and most can be pitched. It’s a fast way to file and most of these you will never need again.

Blue folders: 2 years worth of tax info

  • W2’s, 1009’s etc.
  • tax receipts sorted by category if you have a lot of deductions
  • tax return

Fool.com has a good list of what you need to keep for taxes: Which tax records to keep. The tax folders are odd year and even year. So once the odd year comes back around you can file all the old papers by year in an archive box in the basement or storage. So right now I have tax files for 2008 and 2009 in the file section and the rest of my tax files are in a box in the basement organized by year.

I keep the monthly files and the taxes in the same file box.

Grey folders: action

  • to pay
  • pending
  • open projects
  • data entry

This is where most of the mail you go through ends up if it isn’t thrown out. If you regularly do an action that you get papers for – create a folder. Usually these papers are what create piles around the house. I have the action folders on my desk in a lovely white basket with green fabric. It’s about half the size of a regular file box. Some people put these in their top file drawer, but I like to be able to see it. And it makes mail time sorting even faster.

Orange folders: Remove/Replace

  • insurance papers
  • book club list
  • credit card policies
  • 401K statement

These are for all those papers you get new documents from time to time. So when the new insurance policy comes in, I can throw out the old one. We get a book club list yearly so I don’t need to keep all the old ones. Credit card policies come in every few months so I get rid of the outdated papers. Same with the new health insurance booklet. I love this folder section. I don’t ever have to worry about, "Should I keep this?"  These files fit in one file drawer for me.

Red folders: Permanent

  • medical documents
  • mortgage papers
  • genealogy records
  • education papers

These papers fit in one file drawer for me. Titles, marriage license, and important documents like that should go in a safe deposit box or fireproof safe.

optional Purple folders: interests

  • health articles
  • scrapbook design ideas
  • home decorating articles/ideas
  • inspiration

If you ever wanted to know what to do with all your articles and clippings, this is where they can go. An alternative if you have lots of papers is to use binders. The easiest way to tell if these need purging is if you run out of space. When you have no more room you either have to purge some folders or get a new cabinet. I suggest going through those folders or binders. I have one file drawer for interests. Since I own my own business I also have a file drawer for my business papers.

Until papers are sorted, they are in my in box which I try to clean out every other day or at least weekly.

If you have lots of papers to go through, read my post: Conquering the Paper Pile Up.

And this post will help you create a tickler file. What to Do with the Daily Papers.

 

Full Disclosure: I am also a Freedom Filer Affiliate, so purchases through the above link will help support this site.

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