Only around 40 percent of people say that they could locate important documents at a moment’s notice.
That’s probably because you just end up keeping so many documents that you’re totally unorganized.
However, the opposite could be even worse.
If you throw away important documents into the trash without a second thought, you could be vulnerable to identity fraud.
Therefore, it’s important to know how long to keep documents and which ones you can throw away and when. Let’s get started!
1. One Month or Less
You should be organizing your personal finances on a month-by-month basis. Therefore, whenever you’ve finished your monthly accounts, throw away what you don’t need anymore.
For example, you don’t need to keep your bank statements for over one month. Just make sure you shred them before you throw them in the trash.
You should do the same for credit card receipts and other recipes which you have held on to. But, if the receipt is necessary for the warranty, you need to keep hold of this until the warranty is no longer valid.
Remember, you don’t just need to dispose of paper documents. You also have electronic files which need to be deleted.
2. One Year or More
The average American has a debt of up to $38,000. Therefore, you probably have loan documents which you need to keep until you pay it off.
The same applies if you have owned any major assets. For example, do you have a vehicle for which you have the title? This should be kept until you sell it.
The same applies for any stocks and bonds which you own. Only throw them away if you’ve sold them.
Your pay stubs should be kept for around one year to make sure you can check your accounts for tax purposes. Learn more at pay stub creator.
3. Several Years
If you don’t pay the right amount of tax, the government has up to 6 years to collect the tax or begin legal proceedings.
You may have simply made a mistake on your tax returns. This happens for up to 80 percent of people in 2018.
Therefore, even if you’re confident you have already paid your tax, you should keep hold of your tax records for several years. Just so you cover your back.
4. Never Throw Away
There are some important documents which you should never throw away.
Of course, your birth certificate should stay with you forever.
Other important documents which you should never throw away include your social security documents and death certificates.
Moreover, you should always keep your estate planning documents or life insurance policy safe as well. Make sure you tell your next of kin where they are as well.
How Long to Keep Documents?
You need to balance keeping of important documents for the right amount of time without becoming a hoarder.
Follow our guide on how long to keep documents to make sure you stay organized with your essential paperwork.
Do you suspect you have hoarder disorder symptoms? Check our blog post on how to know if you have a problem.