No, Not Your Vinyl Records…Your Financial Records
Up until last Fall, I wasn’t sure how long to keep old bills, taxes, contracts, medical records, etc. etc. So…at the ripe old age of 28, I had every utility bill, cell phone bill, medical bill, IU tuition payment, credit card statement I had ever paid in my life. That’s a lot of paperwork!
I did some research and found out how long I really needed to keep this stuff and conducted the Great Purge of 2008. Of course I didn’t just throw away this old paperwork; I shredded it.
Based on my research, here’s what I’ve found:
Utility bills, credit card bills, bank statements: Verify they are correct when you receive them and then shred. Better yet: Sign up for e-bills and pay them online. If you are using one of these to verify residency or apply for a loan, then keep 1-3 months on hand or print as needed.
Check stubs: Keep until the end of the year and verify the accuracy of your W-2.
Tax Returns and accompanying verification docs (1099, etc.): the IRS can audit you for any reason for up to three prior years and keeping these returns for seven is the general rule.
School records: Keep an official copy of your transcript and diploma.
Medical Bills: Keep for seven years if you can claim as a tax deduction. Otherwise, five years.
Insurance Records: Five years past the life of the policy for medical and life insurance; and ten for homeowners.
Keep these items forever: Personal health records, marriage licenses, divorce decrees, birth and death certificates, adoption records, wills and records of paid mortgages.
Ideally these documents should be in a fireproof safe or safe deposit box. By keeping better track of these items, it also helps me (and it will help you), manage my finances better. I have to deal with all of this paperwork or e-bills every month and decide what to keep or shred. And now my file cabinet has a manageable amount of paper in it.
If a company has your info or bill available online, then use it. It’s better for the environment and easier on your sanity than looking at piles of bills and paperwork.
Final tip: For other paperwork: if you look at a piece of paper and think, “I might need it.” But then don’t touch it for 3 months: recycle it or shred it! Just let it go.