How to Organize Important Documents

Give that big pile of documents an orderly and secure system of organization.
Give that big pile of documents an orderly and secure system of organization.
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You probably have a stack of documents that you know you should keep, but you may have no clue where to put them. Is that pile on your desk labeled "important" an appropriate option? Or should that stack go in that old shoebox under the bed? Storing important paperwork can be a challenge, but getting organized can save you time, eliminate clutter and give you peace of mind [source: National Association of Professional Organizers].

Getting organized is essential. If something came up and you needed to review a credit card statement from two months ago, would you know where to find it? Can you quickly gain access to your birth certificate and social security card? If the answer is no, then it may be time to do some organizing. Putting your important documents in order is not just a matter of aesthetics. If a fire or flood were to strike, knowing exactly how to access your family's important papers could save you a lot of hassle -- just think of the time and effort it would take to replace them. Another incentive for getting organized is the avoidance of the growing problem of identity theft. Having your social security number stolen can ruin your credit and lead to missed job opportunities [source: Federal Trade Commission].

Having a system in place that allows you to quickly gain access to your important documents will eliminate a lot of stress. There are people who make a living out of helping others get organized, and while it's not necessary for you to be a professional -- or to hire one -- you can follow their lead and make some changes that will leave you feeling a little less stressed and a little more productive.

Check out the next page for tips on how you can start getting organized.

Methods for Organizing Important Documents

So where do you begin? First, you need to gather everything you have and sort it into a few different piles. Ask yourself, "Is this document important, moderately important or trash? While you're doing this, take a moment to really look at what you have. Obviously there will be things that are high priority, such as birth certificates and social security cards, but there will also be things you really don't need to keep. Be honest with yourself and toss or shred what you can.

Things that can be classified as very important should go into one pile. Birth or death certificates, social security cards, immunization records and passports are all things that are high priority, and these items should go under lock and key in a secure location [source: NOLO].

Moderately important things should go in the second pile. Tax records, W-2s, family photos, transcripts, school diplomas and investment statements are all important but may not need to be accessed regularly. These items can be placed in a file cabinet or file folder or perhaps on a digital storage device [source: IRS].

What about the trash pile? While this category seems self-explanatory, you may find it hard to determine what constitutes trash. In some cases, the fear of throwing out something that you may need will keep you hoarding unnecessary paperwork, but don't be afraid to toss it. It's the only way to minimize clutter and establish what's truly important.

Those ads that always accompany your bank statements are trash but what about the bank statements themselves -- should you throw them out or file them? Check out the next section to help you decide what you need to keep and what you can toss.

How Long Should I Keep Important Documents?

You don't need to keep everything forever. In fact, many of the documents you think you need to keep can make their way to the trash pile.

Here are a few guidelines that can help you decide what to keep and for how long:

  • Bank statements - If you don't have online access to your account, keep your bank statements for three years [source: BBT]. You may want to consider going green and signing up for paperless statements. Doing so can help you eliminate clutter and have all your bank statements available at the click of a mouse.
  • Tax returns - How long you keep tax-related documents depends on what type of activity the statements show. As a general rule, keep these documents for seven years [source: IRS].
  • Credit card statements- After checking the accuracy of your statements, shred them. If your statement has any identifying information whatsoever it needs to be properly disposed of to minimize the risk of identity theft [source: Money Management International]. However, if you've made a large purchase or haven't yet received a purchased item, make sure you have a copy of your statement in case you need to dispute the purchase. Your credit card records can prove you paid.

Other documents such as W-2s and retirement savings plans should be kept until you actually retire [source: IRS].

Knowing what to keep and for how long is a good place to start on your road to organization. Now that you know what to keep you need to know where to keep it. Check out the next page for some innovative ways to store your important documents.

Storing Important Documents

There are many methods for organizing your important documents. There's the low-tech approach, which utilizes file cabinets and file folders, and then there's the high-tech approach, which utilizes online or digital storage. You can use whichever method works best for you, including a combination of both low and high tech.

Documents like birth, death and marriage certificates and social security cards, immunization records and passports are all very important and should be kept in a secure location. A safe deposit box or home safe will do the trick. If you go with the home safe option, make sure your safe is waterproof and fireproof [source: NOLO]. It should also be fairly easy to move, so lock boxes can be a good alternative.

Digital and online storage options are convenient, easy to use and provide easy access to your documents. Digital storage of photos is an excellent way to keep your treasured family photos safe while providing you with an easy way to share them with friends and family. Web sites like flickr.com and photobucket.com are free and allow you to store your photos and decide who can view them.

Now that you know where you can store your important documents, another thing to consider is where not to store them. A big mistake some people make is carrying their important documents in a wallet or purse. This is a big no-no. Carrying a social security card or birth certificate around with you significantly increases the risk that it will be lost or stolen [source: Privacy Rights Clearinghouse].

Reduce your risk of identity theft and save yourself a lot of time and stress in the process -- get organized! For more information on organizing important documents, check out the links on the following page.

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Sources

  • BBT. "Shredding Personal Documents and When to Dispose of Them." (Accessed1/7/10) http://www.bbt.com/bbt/Financial-Education/Security/shredding-personal-documents.asp
  • Baum, Katrina PhD. "Identity Theft, 2005." Bureau of Justice Statistics. (Accessed 1/7/10) http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=971
  • Federal Trade Commission. "DETER: Minimize Your Risk." (Accessed 1/6/10) http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/deter.html#whatisacreditfreeze
  • IRS (Accessed 1/7/10) http://www.irs.gov/businesses/small/article/0,,id=98513,00.html
  • Microsoft Online Safety. "Backing Up: What, How, Where." (Accessed 1/7/10) http://www.microsoft.com/protect/data/backup/about.aspx
  • Money Management International. "How to Protect Yourself from Identity Theft." (Accessed 1/7/10) http://www.moneymanagement.org/Budgeting-Tools/Credit-Articles/Financial-Crisis/How-to-Protect-Yourself-from-Identity-Theft.aspx
  • National Association of Professional Organizers (Accessed 1/6/10) http://www.napo.net/default.aspx?AspxAutoDetectCookieSupport=1
  • NOLO. "Disaster Proofing Your Documents." (Accessed1/7/10) http://www.nolo.com/legal-encyclopedia/article-29960.html
  • Privacy Rights Clearinghouse. "My Social Security Number -- How Secure Is It?" (Accessed 1/7/10) http://www.privacyrights.org/fs/fs10-ssn.htm