Financial records: keep or toss?

It’s tempting to keep every piece of paper you ever receive, every seemingly important bit of financial information. Luckily for the state of your filing cabinets, that’s simply not the case. You can – and should – regularly go through your paperwork and toss out whatever you can. (Or more accurately, shred. More on that in my next post.) Of course, it’s ideal to pay bills and receive statements electronically; I encourage you you to do as much of this as you can. For everything else, here is a list of what to keep and for how long. Now you just need to take the initiative to do this on a regular basis, right?

Toss every month

ATM and bank deposit slips, after you’ve recorded the amounts in your check register and checked them against your monthly bank statement

Credit card receipts, after you’ve checked to make sure the item appears correctly on your monthly statement

Sales receipts for minor purchases, after you’ve satisfactorily used the item and if it has no warranty

Toss after one year

Monthly bank and credit card statement (if you don’t itemize deductions)

Monthly or quarterly brokerage and mutual fund statements, after you’ve reconciled them with your year-end summary

Monthly mortgage statements, as long as your year-end statement clearly shows the total amount you’ve paid in interest and property taxes over the course of the year

Phone and utility bills (as long as you don’t have a home office, use your phone for business calls, or anticipate any need to prove long-term residency)

Paycheck stubs, after you’ve reconciled them with your annual W-2 or 1099 forms

Retain for Seven Years

W-2 and 1099 forms

Year-end statements from credit card companies

Phone and utility bills (only if you deduct any portion for business expenses, have more than one home or have moved within the past few years)

Cancelled checks and receipts/statements for annual mortgage interest and property taxes, deductible business expenses, child care bills, out-of-pocket medical costs, or any other tax-deductible expense

Records of expenses incurred in selling and buying a house, condo, etc., such as legal fees and your real estate agent's commission

Keep Indefinitely

Annual tax returns

Year-end summaries from financial services companies

Confirmation slips that show beneficiary designations and the purchase price of stocks, mutual funds, and any other investments you hold; hang onto these records indefinitely because some day you or your heirs will have to know exactly how much you paid to determine the profit on your investment for tax purposes

Home improvement records

Receipts for major purchases such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. – should be kept in an insurance file for proof of their value in the event of loss or damage

Records detailing medical procedures and results

College transcript

Automobile records (title, registration, repairs) – for as long as you own the vehicle

Examples of records needed for taxes (keep for seven years)

Bank statements and cancelled checks

Certificates of Deposit

Contracts

Charitable contributions

Credit statements

Income tax returns

Lease and loan agreements

Loan payment books

Pension plan records

Pay stubs

Keep receipts for as long as you own

Appliances

Art, antiques, collectibles

Clothing

Furniture

Home improvements

Home repairs

Major purchases

Keep in a fire-proof safe or safe deposit box

Birth certificate

Adoption certificate

Death certificate

Marriage license

Divorce decree, custody agreement, property agreement

Citizenship papers

Estate planning documents

Copyrights and patents

Insurance company names and policy numbers

Vaccination records

Deeds and titles to property and vehicles

Military service record

Household inventory, photos, serial numbers

Social security numbers

Passport

Bank and credit card numbers and telephone numbers of issuers

Contracts and other legal papers

Sources:
Diane Harris, Real Simple, April 2000
Marquette National Bank and Catherine Williams, President of Consumer Credit Counseling Services of Greater Chicago posted on Bankrate.com, September 2005
University of Wisconsin Cooperative Extension, 1999