You may not have thought much about it but we all learned the very basics of filing from a very young age – the alphabet. And many of us can still recall the little songs that helped us to memorize it.
The alphabet forms the very foundation of our filing systems. And if you think filing is more for the business crowd or corporate office, you’re missing out on an important money-saving strategy. Filing is essential when it comes to managing money, savings and bills.
In fact, from the onset of their first job, teenagers should have some sort of filing system, even if it’s just a handful of manila envelopes. As the years pass, these basic files should be expanded to a filing drawer, carboard filing box or metal cabinet. And you can make your filing system as portable as you like and as large as needed. But, every household needs one.
While you can just throw receipts, mail and other papers in a drawer – many do, but most cannot find what they need, when they need it. And that will cost you. Getting your papers organized has more benefits than you might think, besides reducing the clutter.
Here’s Why You Need to File Receipts, Papers
- Tax Receipts: Anything tax related should be filed in one folder so you can readily locate these at tax filing time. That’s a time-saver; two minutes work today can save 1-2 hours later. You won’t lose a receipt and miss out on a deduction.
- Pay Bills on Time: You can more easily find bills and review due dates if they are in a current payment folder. That can save you money on late payment fees or even disconnection charges – more money in your pocket. Chances are that when you file things, you’ll take that extra minute to look more closely at the bill – that’s when you’ll catch overcharges or errors.
- Protect Documents: Important documents like previous tax filings, passports, marriage license, mortgage and loan papers, insurance policies – all can be found easily, when you need to refer to them. Should you be audited three years from now, you’ll need to have your tax receipts in order, ready to pull out and substantiate a claim. Loose papers accumulating on the hall table can look pretty interesting to the 5-year old, looking for drawing papers.
- Easily Locate Papers: Find important memberships, social security numbers, pension information or your resume more easily when they are organized in related folders.
- Reduce Stress: It’s difficult to face a mountain of papers when you need something. You can look for hours and not see that particular paper amid the mess. Keeping things filed and organized does reduce financial stress and gives you feeling of being in charge of your affairs – and you are.
Still Not Convinced?
- Do you know where your utility trailer ownership is, or 2008’s copy of your tax filing?
- Could your next of kin find important numbers and documents, should you transpire? Sorry but this is a reality check.
- Can you find the warranty information to get your fairly new vacuum repaired/replaced?
- Could you quickly put your hand on your insurance policy to see if wind damage is covered, should a tree fall on your home?
- The tax man called: Relax, if you know exactly where to find that tax file.
- The bank says you missed a payment? Can you find the receipt or online payment confirmation number to prove you made it?
A filing system, however primitive you want, will help you to find things when you need them and some will save you money. It will also help those that must assist or take over your financial affairs, should you become ill.
How long you keep receipts and documents depends on many variables and what the papers relate to. Generally, tax and business receipts and claims must be kept for several years – which varies per state and country. Utility receipts could be discarded a year later, as long as you’re in agreement with outstanding balances and payments that were made. Other documents such as loan or mortgages are usually kept until they have been cleared/paid.
There’s a good variety of filing type containers and boxes, from expandable divided portfolios, to cardboard filing boxes or wooden drawers sized just right for folders. But if you need folders, measure to confirm if letter or legal size folders are needed. Folders are readily available at many large box stores or office supply depots.
Take charge of your home’s finances, organize receipts and important papers to better manage your money.