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7 Minute Read

How to Organize Your Important Documents

7 Minute Read

document file folders

Being an adult has its perks . . . and challenges. When you’re little, you dream about the day you get to drive your own car, have your own house, and stay up as late as you want. But you never really think about the not-so-fun parts—like paying taxes, having a tooth pulled, or getting your driver’s license renewed. Oh, and what about figuring out how to safely organize all those important documents you’re supposed to hold on to throughout the years?

At some point, asking your 75-year-old mom to overnight a copy of your birth certificate just doesn’t cut it anymore. So how in the world do you know the difference between the important documents and the ones that should go straight to the shredder?

Don’t worry—we’ve got you covered. But first, let’s talk about what the important documents are and why you have to keep them around.

What Are Important Documents?

Important documents are those papers you need to keep around “just in case.” You’ll probably rarely ever need to use them unless a big life event happens, like buying a house, having a baby, changing your name, or making a will. But it’s in those important (but rare) times that you’ll realize you should probably start keeping them somewhere you can find them easily. These documents include:

  • Legal identification documents
    • Social Security cards
    • Birth certificates
    • Adoption papers
    • Marriage licenses
    • Passports
  • Tax documents
    • Tax returns
    • W-2s and 1099 forms
    • Any tax-related forms, receipts and records
  • Property records
    • Vehicle registration and titles
    • Mortgage statements, deeds and bills of sale
    • Insurance policies (home, auto, personal property, etc.)
  • Medical records
    • Wills, powers of attorney or living will
    • Medical bills
    • Burial instructions
    • Health insurance policies
  • Finance records
    • Pay stubs
    • Canceled checks
    • Disability or unemployment records
    • Retirement/pension plan records
    • Investment statements

We get it. Filing all the important documents away on that hard drive may seem like the best option—no loose papers, no mess, and no worries. But it’s always a good idea to have a hard copy on hand, filed safely away just in case. You never know . . . hard drives fail or get lost and computers crash. And the next time you move, you might accidentally forget where you packed it. When in doubt, print it out (and keep it filed in a safe place).

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So when you’re doing your spring cleaning, make sure to file these in a safe place. And no, we aren’t talking about that “safe place” that’s so safe you can never remember where it is.

We’re talking about a fireproof document safe, lockbox or cabinet. It’s also smart to keep them all organized. You’ll want it categorized clearly so you can easily find it. Invest in some folders and labels so you can keep things tidy and readable.

So now that you know how to tell the important documents from the not-so-important documents, you need to know how long you’re supposed to keep them around.

How Long Should I Keep My Bank Statements?

Bank statements: What are they even good for? It’s tempting to chuck them right in the nearest trash can as soon as you get them. But not so fast! They’re actually really great for seeing all of your monthly transactions in one tidy place. So the next time you get one of these bad boys in the mail, take a few minutes and look for anything out of the ordinary. Then file it in a fireproof safe and keep it for at least one year. Same goes for all those pay stubs. You might need these to provide proof of income for when you need to make a big purchase or to dispute any suspicious behavior (like identity theft).

How Long Should I Keep My Medical Records?

The Federal Trade Commission suggests keeping your paid (and undisputed) medical bills for at least one year. Listen: People make mistakes. That intern at the hospital’s billing department probably hasn’t learned the ins and outs of the details, so you may or may not receive the same bill twice. Your medical bills are a record of what you’ve paid and will come in handy when you call and kindly let them know you’ve already paid them. And if you haven’t paid or are disputing the bill, you’ll want to keep them until the dust settles and everything is resolved.

How Long Should I Keep My Utility Bills?

Not long—unless you know you’ve got a trip to the DMV coming up and need to prove your identity. In cases like those, you’ll want to have last month’s utility bills with your name and address front and center. Otherwise, have fun making your own paper confetti with the shredder.

How Long Should I Keep My Tax Statements?

Seven years. Yup—seven! You never know when you might need them. Maybe the IRS wants to do an audit. Maybe you’ll be buying a new house and need to prove you’ve been a responsible human in the finance department. You never know, so it’s best to keep anything tax-related around . . . just in case.

How Long Should I Keep My Receipts?

Shred those suckers now! Unless you’re working from your home office, doing home improvements, or anything else you might get a tax credit on, you really don’t need them. So go ahead and take that pile of receipts you’ve been collecting from your weekly grocery runs and shred them. Don’t you feel better already?

Just in case you were wondering: those warranty records, receipts for big-ticket items (like that new TV), and even proof of home repairs? Yup—you should keep those around until the warranty expires, you sell that TV, or move out of your house.

How Long Should I Keep Property Records?

That depends. You really should keep things like titles, deeds, mortgage statements and even insurance policies for as long as you own your property (or the life of the loan). And once you say hasta la vista to that mortgage payment and your home is paid off, you’ll still want to hold on to those documents for at least 10 years.

If you’re driving around a car on loan, it’s time to pay that sucker off! But when it comes to those loan payments, contract details, titles and proof of insurance, you’ll want to hang on to those for at least 10 years . . . just in case. Debt doesn’t often come back to haunt you, but it’s always a good idea to be prepared. Pro tip: Pay off all that old debt and say goodbye for good with Financial Peace. You’ll breathe a deep sigh of relief when it’s finally gone!

How Long Should I Keep Personal Records?

Personal records are things like your birth certificate, marriage certificate, Social Security cards, retirement accounts, life insurance documents, will and powers of attorney. You need to keep all of these things—forever. While your birth certificate, marriage certificate and Social Security card matter most when you’re alive, your will, powers of attorney, living will and life insurance policies (like term life and disability) help your loved ones after you’re gone.

When it comes to wills, powers of attorney, living wills, life insurance (like term life or disability), and even information on your retirement accounts, you don’t want your family members and loved ones to have to search high and low to find out what they should do with your personal property. And if you don’t have a will, it’s time to get one! You can easily create your will online today. It’s the kindest thing you can do for your family.

The rule of thumb is this: If you think you might need it, if it’s a personal identification document, if it’s something that has to do with your finances, or if it protects your future (like life insurance or a will), then hold on to it. And remember to shred any document with personal information on it before you toss it in the dumpster. You never know who could get their hands on it!

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