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How to Organize Your Financial Clutter

Clearing clutter out of your home can make you more organized and can simplify your life. Clearing away any unnecessary items can also help you find happiness. The same concept goes for your finances. By clearing out financial clutter, you can decrease financial stress in your life. Save time during tax season, and get a better grip on your personal finances.
 
You need to have a system in place and create a routine for dealing with your financial clutter. I have found that my organized office simplifies my finances, reduces stress. It helps me prepare for unexpected events, and gives me more time to do fun activities.

Where to Start

To achieve a system that works, you need to identify what to keep. Where to keep your financial clutter, and when to update your financial records. If you have a mountain of paperwork, the task of organizing everything can seem daunting.
 
All it takes is a one-time deep dive to shred what you no longer need and sort the rest into folders or binders. After your system is set up and complete, make sure to sort and organize as you go in the future.
 

What to keep and for how long

It’s time to open all those unopened envelops to figure out if they are important or not. When doing this, ask yourself: “What’s the worst thing that can happen if I throw this out? Can I replace it if I do end up needing it? Is it something that I may need later?”
 
You want to make sure you keep the most up-to-date information and throw out older records. For example, if you get an updated insurance policy, toss out the old one and keep the most recent document. This will ensure that things don’t get piled up. If the information is no longer useful, don’t store it.
 
The length of time you should keep your documents varies. Here are some general guidelines about when you can throw out tax and financial records. (Please note that this will vary depending on the country you live in.)
Document Retention
 

Important Documents

Certain items you should never throw away. Marriage license, birth certificate, will, life insurance policies, and record of paid mortgage. You want to keep these in a secure place, like a filing cabinet or safety deposit box.
 
Anything related to your home, such as repair bills and the bill of sale, you should keep for as long as you own the home. The same rule applies to your vehicles.
 
You will want to keep contracts, insurance documents, and retirement plan records for as long as they are still valid. You may want to keep receipts for major purchases, like expensive furniture. In case you need to file an insurance claim in the future.
 

Store Where?

Binders are great for storing similar documents in one central location. The great thing about binders is that you can use them to store more than just paper. There are endless options for accessories. From binder tabs to utensil holders or index dividers to page protectors.
 

Declutter Regularly

Organizing your financial clutter is only the first step. To keep your paper clutter under control, when you get a new insurance policy, make sure to discard last year’s. When you receive annual investments statements, shred the monthly or quarterly statements..
 
It’s important to develop a routine for filing financial clutter. That means opening mail right away and filing documents. Being organized can help make taxes, budgeting, and other financial projects less stressful.

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