photo credit: SideLong

Clearing your house of clutter can be a cathartic process. Imagine how much more organized your home’s office will be when you’re not holding on to all of those unnecessary documents. Many documents are only needed for a specific length of time. Before you get started stripping away those extra layers of paperwork, however, you should know exactly what you can and can’t toss.

What to Keep:

Wills – These should be kept in a disclosed location. You’ll want the executor of your will to be able to find it if it becomes necessary.

Real Estate Documentation – The paperwork from purchasing a home, refinancing a home, or making major improvements on the home should all be kept for at least as long as you own the home.

Personal Documents – Keep identifying documents like social security cards, birth certificates, and passports in a safe, secure place. A fire safe is a good option for storage in the home, but a safety deposit box is even better.

Paperwork from Major Purchases – Receipts and titles for cars, appliances, and other big-ticket items should all be kept for the life of the asset. You’ll need the title for any car that you sell or trade in. And, receipts of major purchases make claims for warranties much easier.

Investment Records – Statements from stock accounts and mutual funds should be kept at least as long as you own the account. Then, be sure to check into the income tax record requirements before you shred the statements.

What to Trash:

Tax Returns More Than Seven Years Old – The IRS only requires that you keep your tax returns for seven years. Be sure to keep all of the supporting schedules and documentation that go with your returns, as well. After that time has passed, you may shred them.

ATM Receipts – Once you’ve reconciled your checking account at the end of each cycle, you no longer need to keep ATM receipts. Just verify that the bank has recorded the transaction correctly, and then you can be done with them.

Utility Bills – Although it is a good idea to maintain these records for some time, utility bills that are over a year old aren’t usually required. Once you get your file pared down to twelve month’s worth of records, you can simply throw out the oldest invoice when you file the newest one.