Spring Cleaning: 3 Steps to Organizing Your Financial Documents

Heather Kadavy,

April 14, 2014

Managing Your Money


Organizing your financial documents is not just a spring cleaning project. If you follow these simple steps you can start to rest easy that you are staying on top of your own personal finances.

Take Inventory - Know What You Have

Go through all of your financial documents – what are you keeping around, and for how long.  You can start with a simple checklist:

  • Tax Returns &/or Supporting Documents
  • Investment documents
  • Insurance documents
  • Legal documents
  • Bank Statements
  • Credit Card Statements
  • Expense documents (i.e. utilities, large purchases/projects, etc.)

By designating files or specific areas of your desk for these it will be easy for you to keep track of your documents for when you really need to reference them. Remember to keep up with your filing as the mail comes in so you don’t get lost in paperwork chaos. Depending on the amount of paper documents you retain, you may want to go through them monthly, quarterly or annually to purge documents you no longer need. USe the Retention Schedule below to help you organize your documents in a way that makes sense.

Decide your Record Retention

In reality the more records you keep the more you have to protect from unauthorized view/access and the more likely you’ll be over-run with paper or files.  Here is a sampling of typical retention periods to consider, however when in doubt always consult your legal counsel or accountant.

Document Type

Sample Retention Periods

  • Wills      
  • Power of Attorney
  • Birth Certificates
  • Marriage Documents
  • Divorce or Child Care Orders
  • Trust Documents
  • Military Records
Keep these documents forever. Consider utilizing a safe deposit box or a fireproof safe to ensure they are secure. 

Tax Information & Returns

There is generally a three year statute of limitation for your taxes. Therefore, you can generally shred documents that support your tax return after three years. Longer retention periods apply if you underreport gross income by 25% or more, file a claim for loss from worthless securities, or do not file a return.  You should keep copies of your tax returns forever.  See www.irs.gov  for further information.

Investment Records

Should generally be kept the three years (unless above exceptions are relevant) as supportive tax reporting documentation.  Check with your investment or tax advisor for advice.

Bank Statements & Canceled Checks

Keep those that support your tax return deductions for three years.

Credit Card Statements

There is no requirement to save them, but you may want to until you have had a chance to review if there are any transactions that need to be disputed.

Utility Bills

Unless you are claiming household expenses as tax deductions, there is no need to keep these records very long.


Keep warranties for as long as you own the item or until the warranty expires.

Insurance Policies

Insurance Policies and claim information should be kept for as long as the policy is in effect.

Home Financial Information

Deeds, mortgages and information on home improvements should be kept for as long as you own your home plus the three years for tax purposes.


Staying organized means you know when to safely and securely destroy unnecessary documentation which reduces the amount of paper you need to protect from an information security perspective. The best way to do this is to purchase and utilize a cross shredder which can be purchased at any office supply store for any physical records.  Occasionally your bank or other community organizations will also sponsor Shred Days where you can bring your documents to a defined place at a defined time and a certified shredding company will be on hand to shred your documents for free right in front of you.

Media and hard drive destruction is the best way to dispose of sensitive information that is stored electronically.  If you choose to partner with someone, do your research and make sure they are a reliable document destruction company who will provide you with a certificate that states they have rendered the information 100% irretrievable. 

Final Thought

As you can see organizing your financial documents may sound like a tough task, but by following these three simple steps you will have an organizational system in place,   you’ll be securely protecting your information to only those who have a need to access them, and you will be better prepared when questions arise regarding these documents.

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This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.