I’m a stickler for record keeping. I keep everything from bank statements down to supermarket receipts. My record keeping is not perfect, but I know where everything. It’s important to keep financial records and I have been doing this for the last four years. My documents are saved in yearly diaries, but in 2013 I will go to an individual folder system.
How Long Should You Keep Financial Records?
Opinions differ on how long should you keep financial records and exactly what you should keep. I think it depends on what it is. If you’re like me and save supermarket receipts, you would not need to keep them for seven years. I’ve seen scanners made specifically for this purpose, but I should think a regular scanner would be just as fine. This way you would have all of your documents stored electronically, which really cuts down on space and paper hoarding.
Bank Statements
Last year when I was doing some spring cleaning, I found some of parents’ old financial statements dating as far back as 1989. I think that’s a bit of a stretch. Personally, I would keep hard copies of bank statements for about five years and then shred them. If I scanned them, I might get rid of them a bit faster. Plus, most of these documents are available electronically, so you don’t need hard copies at all.
Home Documents
Home documents such as mortgage and loan records should be kept forever. I’ve read that they should be kept for the life of the agreement, but keeping them indefinitely can be beneficial. If you ever want to sell your home, you would have a better idea of what the home really cost you and not the original selling price, which can be hugely different. Pension information, medical records, investments documents, legal documents and tax related records should also be kept indefinitely and in a safe place.
Bills
Utility bills, supermarket receipts and other store receipts do not have to be kept that long. One exception I can think of is receipts for purchases with warranties or return information. Another is receipts for big purchases like electronics, furniture, computer equipment etc.. These receipts should also be kept in a safe place in the event of a disaster and for insurance purposes.
One big thing to remember is when you are discarding any personal information, shred it. Identity theft is a crime that thrives on one’s personal information. Don’t make yourself an easy target by throwing your stuff into the garbage. And as the years go by, go through your documents and through away the older ones.