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.