An overstuffed filing cabinet makes it harder to file new documents or find what you need. Here's some of the stuff people hang onto that they can usually toss: 1) Annual reports for your investments (you can find them online). 2) Bank Statements (you can find them online) 3) Investment statements (you can find them online). 4) Old paid bills (only keep paid bills for one tax year. Check with your accountant. 5) ATM or credit-card receipts (if they match what's on your statement and aren't needed for tax purposes). 6) Expired insurance policies. 7) 401(k) statements, once you've ensured your contributions are being reported accurately. 8) Investment Prospectuses. 9) Paycheck stubs, once you've got your annual W-2s (you might want to keep your year-end stub if it has tax-related information, such as union dues, that is not reported on your W-2). 10) Tax returns older than seven years. (Check with your accountant; you might want to hang onto the return itself but trash the accompanying paperwork).

 

What to File? Filing systems are not exactly sexy. Let go of the idea that there is only one "right" way to organize your paperwork. Everyone will be comfortable with a different filing system. But we are looking to make a big difference in your financial life. I use a filing cabinet, but I have used an accordion folder and a plastic file box in the pass. The important thing is to label the files or tabs so that you know what they mean. Again consistency is important.

 

I am pretty straight forward. I label the cable bill folder "Cable" however you might label it the company's name, e.g. "Comcast." Here are some sample labels: Cell Phone, Cable, Car, Life Insurance, Capital One Visa, Capital One MasterCard, ING Direct Savings Account, Citibank Checking Account, American Express, Warranties, Rewards Programs Cards/Details- (Airlines, Best Buy, grocery store, etc.), Pets, Medical Receipts, Gas Company, Electric, Water/Sewer, Dell Credit Card, Internet - (my internet is separate from my cable), Receipts for big purchase in case I need to return something (e.g. Flat Screen Television receipt from Best Buy or Receipt from REI for tent I purchased). Everyone will have different labels, you can come up with your own.

 

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