What to keep, what to toss: Spring clean your financial records

Are old documents taking up too much space in your home? Is your filing system overflowing with outdated papers? Do you have boxes full of yellowing financial records and you’re not sure what to keep? 

As you clean out your home for spring, consider purging those old documents and records. While you don’t want to throw away anything important, there’s no point in hanging on to things that no longer serve a purpose in your life. Below is a simple guide to help you figure out what to keep, what to get rid of and how to safely dispose of your personal documents. 

Things to keep forever 

If you’ve ever lost your Social Security card, you know what a pain it can be to replace critical documents. There are some papers you need to keep for life — and it’s best to store them in a secure place like a fireproof lockbox or safe deposit box. These include: 

• Birth certificates
• Death certificates
• Social Security cards
• Adoption papers
• Divorce decrees
• Life insurance policies
• Wills, trusts and power of attorney documents
• Health records
• Records pertaining to a settled collection account 

Things to keep for seven years 

Most financial experts recommend hanging onto financial documents, or documents related to a contract, for at least seven years. If you get paperless bank statements, check with your financial institution to find out how long it keeps your digital statements. Other docs that fall under this rule include: 

• Tax-related records, including:
  • Tax forms
  • W-2s
  • 1099s
  • Transaction records for taxable accounts
• Documents related to insurance payouts 

Home-related documents as long as you live in the house, including: 

• Sales contracts
  • Deeds
  • Mortgage paperwork
  • Appraisals
  • Receipts for costly home improvements
• Auto records and receipts for items with an active warranty
• Receipts for expensive items (in case you need to make an insurance claim)
• Insurance policies you’re still covered under 

How to dispose of old documents 

Once you’ve sorted out your throwaway pile, the last thing you want to do is dump it in the trash or recycle bin. Identity thieves can raid your trash and use your information against you. Any documents with sensitive or personal information should be shredded, burned or otherwise completely destroyed. Be thoughtful when you dispose of docs that include: 

• Account numbers
• Birth dates
• Passwords and PINs (which should never be written down anyway)
• Signatures
• Social Security numbers
• Names
• Addresses
• Phone numbers
• Email addresses 

PROTIP: OCCU’s annual Shred Fest event is a great place to dispose of those sensitive documents safely and securely. Learn more here. 

Tips for staying organized 

Once you’ve purged your old files, take a moment to enjoy the feeling — because it won’t last. It doesn’t take long before the papers start piling up again. You can manage the clutter by streamlining your filing system and sticking to a retention schedule. 

Start by gathering all of your docs in one place. Set aside the items that need to be stored safely and sort the rest into folders by type. Use a labeling system that makes sense to you so you can easily locate documents when you need them. For example, filing tax records according to year will allow you to see at a glance which ones can be tossed out. Designate a home for every type of document in your household, and file them as soon as possible after you receive them to prevent pileups. 

Also, while there are some people who find having physical copies of their important documents worthwhile, consider going paperless to avoid clutter. Most financial statements and bills — certainly those from your OCCU accounts — can all be delivered to you electronically. Keeping your home, and the environment, a little less cluttered. 

What’s next? 

Congratulations! You’ve created a clutter-free home! Now, it’s time to focus on making sure the path to your financial future is clear and bright. Our Investment Services team can help you create an investment plan based on your goals.  

Now, make a commitment to an annual financial check-in as part of your spring cleaning, ensuring your documents are in order, your savings are on track and your investments are secure. With regular upkeep, it will take no time at all! 

Start by gathering all of your docs in one place. Set aside the items that need to be stored safely, and sort the rest into folders by type. Use a labeling system that makes sense to you so you can easily locate documents when you need them. For example, filing tax records according to year will allow you to see at a glance which ones can be tossed out. Designate a home for every type of document in your household, and file them as soon as possible after you receive them to prevent pileups.

Once you’ve got a filing system in place, commit to regularly weeding out old documents. You can even add a note to the folder to remind yourself when it’s time to purge again. That will help you save time on spring cleaning next year!