Today we’re going to tackle the paper pile, but before we start, let’s set up our complete filing system.
My filing system consists of hanging files which are labeled with general categories. Inside, I like to use labeled manila folders, because this allows me to have subcategories. I’m going to share my most basic household file list with you, to assist you in setting up a basic system. We have additional files for our personal needs, and as you begin filing your papers, you will probably find that you need additional categories as well. There may be some that you won’t use at all, but this will get you started.
We’ve already established the first two files:
BILLS
WORKING FILES
Next are:
BANK (use a subcategory folder for each account)
CHILDREN (this is for bulky stuff that doesn’t fit in the HMG)
-BEE
-BABY C.
DENTAL
-DH
-ME
-BEE
DISCOVER CARD
HOME REPAIRS AND IMPROVEMENTS
INSURANCE
-AUTO
-HEALTH
-HOMEOWNERS
-LIFE
MEDICAL
-DH
-ME
-BEE
-BABY C.
PUMPKIN (the cat)
TAXES
-INCOME
-PROPERTY
UTILITIES
-PHONE/INTERNET
-ELECTRIC
-HEATING FUEL
-SATELLITE
-TRASH/RECYCLING
VISA CARD
(NOTE: We keep bank and investment statements in 3-ring binders, organized by month. These were provided by our financial institutions).
This basic system works well for the handling of weekly household paperwork. We also have business and rental property files, but I won’t share these lists, because they aren’t applicable for the majority of my readers.
In our long-term filing cabinet in the basement, we have the following files:
INVESTMENTS (we keep the annual reports and prospectuses here)
OWNER’S MANUALS
RECEIPTS/WARRANTIES
TAX RETURNS
WILL (copy)
We keep abstracts, deeds, titles, birth/marriage certificates, paid promissory notes, savings bonds, etc. in our safe deposit box at the bank. We rarely need these documents, and we want to protect them from damage, because they’re difficult and expensive to replace.
At year-end, we put all of our paperwork in a banker’s box, label it, and put it in long-term storage in our back shed. We keep these boxes for seven years, which is the statute of limitations for IRS audit. After seven years, the contents get shredded and recycled.
Here are a few tips for making your files:
1) Print the titles of your tabs and labels with large, bold letters. I like to use a labelmaker for this.
2) On subcategory file labels, indicate the hanging file titles in which they belong. Here’s an example:
File title: INSURANCE
Subcategory titles:
Ins: AUTO
Ins: HEALTH
Ins: HOME
Ins: LIFE
3) When choosing file titles, use the words you most commonly associate with the documents. For example, “DEED” instead of “WARRANTY DEED.” This will make it easier for you to find things.
4) If you find that your subcategory folders are making your hanging files too bulky, considering having more than one hanging file per category. For example:
UTILITIES (1 of 2)
-PHONE/INTERNET
-ELECTRIC
-HEATING FUEL
UTILITIES (2 of 2)
-SATELLITE
-TRASH/RECYCLING
5) Arrange files alphabetically
6) Clip related papers together, to keep your files neat and orderly. I prefer binder clips for this, because paper clips slip off, and catch on other papers.
7) Don’t use general categories like MISCELLANEOUS or INFORMATION. All papers could potentially fit into these categories, and they’ll become catch-alls for stuff you don’t want to deal with. This won’t help you get and stay organized.
If you operate a home business, consider using different colored folders for your business files. Arrange your files so that the folders of each color are together and alphabetized. We have a home business and a rental property, so I use three different colors:
Green-household
Red-rentals
Blue-business
9) Keep it simple. If you get too detailed and make gazillions of files, your system will become tedious and complicated, and you won’t enjoy using it!
Before you begin filing, I highly recommend that you read this article, “Your Important Papers: What to Keep and Where.” This is a very useful reference that I keep in my HMG and refer to often.
Now you’re ready to tackle the pile. Start at the top, and handle each paper only once. Don’t set anything aside to deal with later, and use your recycling bin liberally! Remember that only 15% of filed paper is ever referred to again.
IMPORTANT! To prevent identity theft, make sure to shred any papers with personal information in a cross-cut shredder before you recycle them. This includes names, addresses, account numbers, social security numbers, and birth dates. Don’t take chances–90% of identity theft is caused by consumers being careless with their own information.
When you’re done, send me an e-mail. I love to hear your success stories!
