In 2023, it's estimated that 347.3 billion emails are sent every day. Most of us open them via our smartphones.
Whether it's finding that paper document you swear was just in front of you or it's in digital form, looking for it accounts for 21.3% in productivity loss. That's a lot of time wasted doing something no one enjoys.
It's not always easy to figure out what to keep, what to toss, and where to keep these items. Keep reading to learn how to declutter paper and digital files.
What To Keep, Toss, & How To Up A Working System
Before you learn how to declutter paper and digital files, you need to know what to keep and for how long.
What you need to keep largely depends on what you do for a living. If you own a business and/or work from home, you'll have a different set of items that you'll need to keep for tax purposes than a salaried employee who works in an office will.
What To Keep Forever
No matter what you do, here are the items you should keep forever:
Birth and death certificates
Divorce papers
Life insurance policies
Marriage licenses
Military discharge documents
Social security card
Wills and living wills
It's also a good idea to keep all of your tax returns.
Where To Keep Your Forever Documents
You should keep these items separately in either a safe deposit box at your bank or in a fire-proof safe at home. If kept at home, lock these documents up along with your passport.
These are items that will be very difficult to replace should something happen.
What To Keep For 3-7 Years
The IRS can ask you for supporting documents for 3 to 7 years after you've filed a return. Unless you purposely have defrauded them and then there's no statute of limitations.
Assuming you've obeyed the laws, here are the supporting documents you should keep:
W-2s
1099s
Bank and brokerage statements
Charitable donations
Tuition payments
Make sure no other financial institutions such as creditors or insurance companies need copies before you get rid of any documents.
Where To Keep These Items
If stored as a paper document, store all of these items together in the same folder as your tax return. You can also scan and upload them.
With both paper and digital documents, create a separate folder and name it "Tax Documents" and the year. This will make it easy to find if you are audited.
Make sure you keep items like all charitable donations together and organize them by date. If stored online you can create a subfolder. If in digital form, just paper clip them together.
What To Keep For 1 Year
Thankfully, for the items you need to keep for a year, it's typically pretty easy to get a copy from the source should you need to such as:
Credit card statements
Bank statements
Pay stubs
Just make sure the statement line up with your own records. It's easy for thieves to rip you off if you don't pay close attention.
Where To Keep These Items
It's a smart idea to create an online account for your credit cards and banks. Most financial institutions keep copies for several years online with easy access so you don't have to worry about saving and storing them.
If you do want to have a copy, either download them and create a folder with the name of that institution and the year. You can do the same if it's a paper document.
What To Keep For 1 Month
Here's what to keep for 1 month, but only if you're not self-employed:
Utility bills
Cable bills
Cell phone bills
Bank withdrawals
Deposit slips
Verify that your withdrawals and deposits match your bank statement, then you can toss them. If you are self-employed, keep your utility, cable, and cell phone bills if they're related to your business.
Where To Keep These Items
If you pay your bills online, all of these companies will keep records of these accounts. If you close out any of these accounts during the year, keep a record that you did so in case there are any questions in the future.
I once had a cable company put my account into collections 3 years after I returned their equipment and closed the account. It was for $39 that they owed me and it took months for me to clear up and get my money. It was a huge time suck and incredibly frustrating.
You can also download a copy and keep them in a paper or digital file. Again, just name the file after the company and the year to keep them straight.
You can also create a file for the fiscal year such as 2023 Financial and then create subfolders for all of these items. If it's a paper file, you can create a similar system.
Get Help Creating A Working Paper & Digital Document System
Learning how to declutter paper and digital files is only part of the process. Learning how to implement a document system that works for how you work, live, and think will ensure that you can easily find everything you need.
It will also save you time, and money, and help you stay calm and in control. Don't wait until you feel overwhelmed with paper and digital clutter, click here to book your free one-room decluttering audit today.