Assuming you have been unable to achieve paperless perfection, managing household records can be a tricky — never mind, time consuming — business, even for the uber organized.
If you keep every brokerage statement, pay stub and credit card bill you receive, you’ll have the production crew of “Hoarders” salivating in a matter of months.
But if you toss all your paper without a minimal holding period, you might be unable to flag errors in your account, defend yourself from the IRS, or prove ownership of property should a dispute ever arise.
Ah, the perennial pickle.
Tax season, though, is the perfect opportunity to attack your files and figure out what you can shred, what you should retain and how long you need to keep it.
“I don’t care if you have a fancy home office or an accordion folder,“ says Gail Cunningham of the National Foundation for Credit Counseling. “You need to create a financial center in your house and get organized.”
There are obvious candidates for the file cabinet (preferably a fire-safe one) — basic legal documents you should keep forever.
That includes birth certificates, current passports, insurance and annuity contracts (for as long as they’re active), wills, Social Security cards, mortgage deeds, real estate bills of sale, marriage certificates, separation or divorce papers and medical records.
You should also keep diplomas and transcripts, adoption and custody papers, insurance records (accident reports, claims and policies) property appraisals, military discharge papers, and an itemized inventory of your household goods, necessary if you ever need to recover stolen items or settle an insurance claim.
For that reason, you should also retain receipts for all major purchases like rugs, jewelry and pianos, as proof of their value.