Make Organizing Your Paperwork Work


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How to Organize Paperwork

A day doesn’t go by that I’m asked by at least three or four people, “Johnny! How do you organize all of your financial paperwork?” Actually, that doesn’t happen. In fact, no one has ever asked me that question. But since I just went through all of our paperwork this weekend and ’tis the season for spring cleaning, I figured I’d shed some light on my OCD ways.

First and foremost, you should know what things find their way into our heaping mountain of unorganized paperwork, what we do with them, and how long they stick around.

IMPORTANT NOTE: Any documentation that is needed to support your tax filings should be kept for 7 years. Disregard the throw-away date if this applies. When in doubt, keep it.

Bills

This would include all utility, cell phone, cable/internet bills. When we get bills, we make it a point to take care of them immediately, not unlike Inbox Zero (which you should add to your spring cleaning list). Since most statements are now available online for up to 12–24 months or longer, we opt for paperless billing with most services.

When to throw away bills:  1 year

Receipts

This has always been a subject of contention in our home. We try to only save receipts for big ticket items, warrantied items, medical expenses, charitable donations, and 1099 (self-employment/consulting/freelance) purchases.

When to throw away receipts: as long as you own the purchase

Bank/Credit Statements

We no longer receive any paper copies of bank or credit statements. They’re important to have access to, but most banks and credit cards offer sufficient digital statement archives. Should you still receive either, neither of these should collect much dust.

When to throw away statements: 1 month

Investment Records

Having your money make more money is kinda cool. But the accompanying paperwork ain’t. Especially since you’ve got to hold onto these suckers for at least three-quarters of a decade.

When to throw away investment records: 7 years after investment is closed/sold

 Insurance Paperwork

Auto, home, life, zombie invasion. And with all of those policies come lots and lots of paperwork. We’ve opted to slim down this section by using online policyholder benefit info, and downloading member ID cards straight to our phones.

When to throw away insurance policies: as long as you hold the policy

So now that we’ve figured out which finely sliced pieces of lumber to hold on to, it’s time to organize. Here’s a visual breakdown that keeps some method to our madness:

Our Organization System

Our Organization System

After trying out a few different methods, we finally settled on keeping things organized by the amount of time we needed to hold on to them. The expanding organizer ($17, Amazon) is great for everything we need to keep longer than a year. Tax returns, insurance policies, titles, personal documents (marriage license, birth certificates, etc), medical records, etc. It’s durable, portable, and holds a lot o’ trees. Ideally, we’ll buy a fireproof safe in the near future to store some of the more important personal documents.

The brown 12-month expanding file ($11, Amazon) is perfect for filing documents, bills, and other financial-related paperwork throughout the year. Each tab represents a month of the year, which makes it easy to throw March’s water bill into its respective March pouch. Then at the end of the year, we always empty the year’s contents and throw them into the air while jumping on the bed. Or not. We actually methodically take each document out, determine if it needs to be kept or not, and start anew for the next year.

And finally, our friend the blue 12-month check file ($8, Amazon). This little guy makes our yearly receipt organizing a cinch. As mentioned before, we hold on to all big ticket, self-employment related, and warrantied purchase receipts. We also cash all of our checks remotely using our phones, so we store all deposited checks here. And like the letter-sized brown file, we empty the contents at the end of the year and file them in the big expanding folder or trash them.

And that’s how we stay organized.

What’s your method for keeping things tidy? Or do you go for the “put everything paper into that one filing cabinet, take two pills, and call me in the morning” method? Or are you completely paperless and in a constant state of zen?

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39 Comments

  • Reply Mrs. Pop @ Planting Our Pennies April 9, 2013 at 8:05 am

    We’ve got a safe with a couple of binders in it. (One for the rentals, one for personal stuff.) But we don’t keep regular bills, checks, or pay stubs. That’s all stored securely online and I feel better not having all the extra paper with personal information floating around.

    • Reply Joanna April 9, 2013 at 9:26 am

      We’re the same with bills and pay stubs. We have as much paperless as we can. There is *one* utility we get that can’t be paperless or be set up for automatic payments and it drives me crazy!

    • Reply Chris April 9, 2013 at 9:46 am

      We just went paperless and it’s been an interesting transition. We like it but we’re finding it a little cumbersome because we used to pay bills by having the hard copy as a reminder. Lately, I’m setting reminders when certain bills are due so there’s no “What do you mean, I never paid that bill” moments.

      I like not having the paper but it definitely requires more accountability going the paperless route.

      http://amplifytoday.com/online-life/

      • Reply Joanna April 9, 2013 at 3:06 pm

        Agreed. If you go paperless, you gotta have either reminders or auto pay. Johnny and I prefer the latter, and it seems that more and more companies are making that an option.

      • Reply Sara April 9, 2013 at 8:38 pm

        Google Calendar is great for keeping track of online bill payments. I created a separate calendar and then shared with my boyfriend so we both have access to what’s due and when.

        • Reply Chris April 9, 2013 at 9:57 pm

          Great idea. I already have a gmail account so the two will be in sync. Thanks for the tip!

        • Reply Johnny April 10, 2013 at 1:07 am

          Awesome saucesome! Joanna and I share Google calendars, so that would be a great way to stay on top of them.

  • Reply The Norwegian Girl April 9, 2013 at 9:07 am

    I have an expanding organizer, but honestly, I´ve just tossed the papers into it, without really filing them…. I know, I know, I should really do something about that. This post worked as a great reminder!!:-)

  • Reply My Financial Independence Journey April 9, 2013 at 9:11 am

    Everything goes into the file drawer. Occasionally, usually around when I move, I gut all of the stuff that’s too old or insignificant to keep around. This is probably not the greatest system, but it works so far.

    • Reply Joanna April 9, 2013 at 9:28 am

      Hey, whatever works for you is the way to go. Johnny and I will go through bouts where there are papers just strewn across our desk for weeks (sometimes months!). And then we go in and organize the heck out of them. Fun times!

  • Reply Catherine April 9, 2013 at 9:18 am

    We have a similar system as you except my favorite way to ‘organize’ my bills it to not get them at all. ANY bill I can have e-mailed or done electronically, I do. I HATE paper!

    • Reply Joanna April 9, 2013 at 9:31 am

      Agreed, Catherine! The e-bills are the easiest to organize by far! If we have automatic payments set up, we have the bill emailed to us. If there is no automatic payment, we like getting a paper version mailed as well, as a secondary reminder to pay it.

  • Reply Elvin April 9, 2013 at 9:24 am

    We keep everything in a plastic envelope which gets thicker and thicker every time new important document comes in. We will soon be buying an expanding organizer to fix that problem. For the receipts, as soon as we recorded the receipt we throw them away. For the bills, we usually sign up for paperless billing online.

    • Reply Joanna April 9, 2013 at 9:34 am

      I’d like to get to the point where we don’t save our receipts anymore! I know there are apps where you can take a picture and store the receipts online, and I’d like for Johnny and me to head in that direction. I’ve just got to convince Johnny!

  • Reply Johnny Moneyseed April 9, 2013 at 10:16 am

    We have a room in our house that we throw all tax documents and receipts into. There’s no organization system. We usually try to crumple every paper at least a little bit as well. Making tax time harder than it needs to be is a top-priority for us. It’s already one of the worst times of the year, so why not just add a little bit of stress to the pile (literally).

    Actually we are super organized. We have a similar system, we just don’t keep any form of receipts. If I’m going to use it or consume it I throw away the receipts. Most of our real purchases (over $20) are from Amazon, who emails you a courtesy copy of the receipt, which makes life super-easy.

    • Reply Johnny April 10, 2013 at 1:13 am

      Amazon receipts are a heaven-send, but we still hold on to any 1099 receipts or big ticket purchases, like our TV. I’ve never really used a warranty before outside of AppleCare for our iPhones, but I’d imagine AMEX would want proof of purchase via receipt or something. Maybe it’s overly cautious, but I’d fine with saving a little piece of paper for peace of mind.

  • Reply Rob April 9, 2013 at 10:30 am

    Well, my family well knows that I’m the guy who is the most organized around here (which is why I maintain our family budget and handle most things dealing with finances). Not that I keep it all in my head and not share things with my wife (as that would be a big mistake given that one never knows if one might get run over one day by a Mack truck ! lol).

    Anyway, you have to remember that this dude started organizing and keeping records well before home computers (eg., Commodore 64, etc etc) were ever invented and so everything was paper oriented back then. So old habits die hard and don’t completely die off. Yes, much of my record keeping is now electronic but then again much of it is still kept in paper form. The deal is to know how to back things up safely, when to discard things when no longer needed, and how to file information intelligently for future back reference, as/if req’d.

    That all said, I file important papers in a home safe as well as in the safety deposit box at our neighbourhood bank. I also file copies of wills, taxes, insurance policies, product/service warranties, financial investment/bank/credit card statements, and other important receipts in a tabbed 3 drawer filing cabinet which we purchased years ago from a used office furniture discount store. So everything is in one place, organized and handy where everyone in our family knows where to find things. One thing I always do when discarding critical paper stuff is to use my home paper shredder so as to guard against the risk of identity theft. A paper shredder is not expensive and worth the price in my opinion.

    • Reply Johnny April 10, 2013 at 1:21 am

      When you started talking about growing up without computers and Commodore 64, I imagined you in your office with one of those screeching dot matrix printers. But from everything I’ve read from you, it sounds like you’ve probably adapted well beyond those days. :)

      Thanks for mentioning the shredding. We don’t currently own a shredder, but I take all of our sensitive paperwork to work where a shredding service comes by weekly to “destroy the evidence.”

  • Reply debtperception April 9, 2013 at 10:41 am

    Aside from the stacks of papers decorating my desk and the area where we throw everything when we get home, I keep my papers in a file crate with hanging folders. I go through it once a year and get rid of old stuff that we no longer need. For a while I was trying to keep receipts until I entered product information into my grocery price list spreadsheet but we’ve been moving around a lot this year (we’ll have had our belongings in 4 different places by the end of the month!) and I gave up several months ago.

    • Reply Johnny April 10, 2013 at 1:29 am

      I’ve also gone through phases of wanting to save and track every last receipt, It’s certainly an ambitious goal, but truthfully, I don’t think we’re in any worse position now for not doing it. So maybe wait and see how you fare without it for a little while before dedicating more time to it.

  • Reply Chris April 9, 2013 at 11:09 am

    Me? I’m terribly unorganized. I’ve finally got a system where I stuff all my insurance, tax, bills, etc. in a plastic filing box with a couple hanging folder. So I at least know if I need something I can spend 3 hours going through paper to find it. I am going to be making a big push to reorganize my paperwork this summer. I’d like to get a couple big 3-ring binder with dividers. My dad has his stuff organized this way and it looks so neat and easy to find stuff in. Or maybe I’ll do it all electronically. I would love to create a better system. I like yours too. It’s simple. What would be even cooler is if I could create a file system electronically and scan in all my existing paperwork using OCR and create some sweet PDFs that I can use the find function with. Maybe I’ll do that. It will be amazing, I’m sure.

    • Reply Johnny April 10, 2013 at 1:37 am

      And then when you’re done, we’ll hire you to do the same for us. That would actually be amazing. I’ve seen infomerical-y commercials for scanners that do basically what you’re talking about, but I still don’t know if I’d trust it though. You can never trust robots 100%.

  • Reply Beth Sheridan April 9, 2013 at 12:26 pm

    Receipts are what I struggle with the most, so I finally just put them in a certain pocket in my purse and then in a stack on my desk and deal with them everyday before I go home and that’s what has finally worked for me. Love your organization tips!

    • Reply Johnny April 10, 2013 at 1:59 am

      Purse, desk, folder, cookie jar, it doesn’t matter where they go, so long as they’re actually addressed by day’s/week’s/month’s/year’s end. It’s always an awesome feeling when you figure out a system that finally works for you.

  • Reply Brian April 9, 2013 at 12:36 pm

    I archive as little actual paper as I can since most everything is now stored online. Since the IRS now requires that all brokerages keep track of cost basis this is saving a lot of headache for me on new purchases. Of course some of the older ones are still a little hard to nail down exactly.

    • Reply Johnny April 10, 2013 at 2:02 am

      There’s a part of me that can’t let the tangible paperwork go. I don’t feel like I’m doing an adequate job as a taxpayer and financial taskmaster if I don’t have papers to rifle through. But good on the IRS for making everyone’s lives a little easier.

  • Reply Mimi April 9, 2013 at 1:16 pm

    I wish there was a “like” button, I would like this post! Thanks for the great tips! I have one of those plastic file boxes as well as an expanding folder, and I have never been really happy with the way they are organized… plus all my old receipt envelopes just get annoying! Can’t wait to get re-organized!

    • Reply Johnny April 10, 2013 at 2:06 am

      As much as I hate reorganizing in the moment, it’s always a huge relief to get it done. And it makes keeping things organized from that point out a whole lot easier, too. I know where everything needs to go and it’s as easy as dropping it into a single file folder.

      And if you’re still looking for that “Like” button, just scroll up to the end of the post and you’ll find it. 😉

      • Reply Mimi April 11, 2013 at 7:42 am

        Oh wow! Has that always been there? I feel silly :)

  • Reply JMK April 9, 2013 at 1:24 pm

    All our recurring bills are scheduled to charge to our VISA with the invoice either being emailed to us, or an email telling us it’s posted online and then we download a copy. All these bills are for identical amounts everymonth so they are all scheduled in our spending plan for the next 12 months (cell, land line, internet, car/house/life insurance). Having all our bills going to the VISA means there is no due date to remember, even when you are away on vacation. I pay off the VISA weekly (set up an auto payment when we’re on vacation) so that’s pretty much only bill I have to deal with. Property taxes and mortgage are set up for auto payment from our bank account and we receive hard copy documentation which we’ve scanned and then shredded the paper version. The electric bill which they won’t allow to be paid on credit sends us an ebill which I download, and I go into our online banking and set up an auto payment for 4-5 days before the due date. This is the one exception in our otherwise totally automated billing process.

    For receipts for major purchases or items with warranties, I scan the receipt and shred the original. Our credit card, bank and investment accounts all post statements online. We download a copy in case they delete them after a year and we want to be able to look back farther. So far I haven’t deleted anything I’ve saved electronically, because those file go back only 3-6yrs. At this point I’m still tossing out hardcopies as they reach 7yrs. I’ll start deleting softcopies when they pass 7 years. I know some things could be deleted sooner, but every January I just go through and delete another year anywhere I find it. The only thing I’m still adtively keeping in hardcopy are our taxes. I file online, but we have to keep all the receipts, and documentation for 7yrs in case we’re audited. Yes I could scan everything but it’s just been easier to staple everything together and toss it in the filing cabinet. Compared to the giant cabinet of paper we used to keep, A little stapled pile for each of us x 7yrs is manageable.

    • Reply Johnny April 10, 2013 at 2:11 am

      That automated system you’ve got set up sounds like a dream. Awesome job! We’ve got about half of our bills automated, so we just need to take the time to get the rest of them up to speed.

      I really like the idea of scanning receipts and all other paperwork. I worry a little about how much more time that might take than just slipping it in a folder, but I’m sure the benefits of having it digitally available and searchable make it all worth it.

  • Reply Grayson @ Debt Roundup April 9, 2013 at 1:41 pm

    I run with the standard filing cabinet that I used for my old business. It works well, but now I am working toward paperless.

    • Reply Johnny April 10, 2013 at 2:15 am

      Paperless seems like a worthy next goal for our organization system. I’d rather avoid having to scan anything, but as long as physical receipts are doled out stores, that’s the way it’s gotta be.

  • Reply Rachel April 9, 2013 at 4:07 pm

    Right now I organize paperwork (bills, receipts, etc.) in different folders, but I need to invest in something else soon!

    • Reply Johnny April 10, 2013 at 2:17 am

      It doesn’t need to be anything fancy, just something that works for you. We preferred the bigger expanding files so that we didn’t have quite as many loose folders. But to each his/her own. Good luck!

  • Reply Lily April 10, 2013 at 1:03 am

    I just bought a brown envelope days ago where I should keep important documents. I think I have to work with the bills and receipt soon and have to figure out where to put them and so glad that I’ve stumbled upon your site. Too much clutter is not really okay.

    • Reply Johnny April 20, 2013 at 1:40 pm

      Thanks, Lily. Too much clutter is as sticky as peanut butter. <—— makes no sense, but rhymes.

  • Reply First Financial Friday May 2013 May 3, 2013 at 1:12 am

    […] MAKE ORGANIZING YOUR PAPERWORK WORK by Our Freaking Budget  shares with us the timeframes for keeping bills and other paperwork as well as a nifty system for filing and organizing. […]

  • Reply Jenna January 11, 2016 at 6:26 pm

    I keep my paper bill statements only for about a month. Once it’s paid, I don’t throw it away until I’ve paid the following month’s bill. That way I have a chance to compare the 2 statements for any discrepancies. Anything older than that I can just look up on line. For monthly bills, I’m pretty happy with my system. But as far as insurance, investments and other paperwork.. I’m pretty terrible about organizing them. There are growing piles stacked in various places around the house. I need someone to come and go through them all for me!

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