By Heather Murray
Question: I’ve been spring cleaning my home and have a lot of old financial records taking up a lot of space. How long should I keep things like receipts and paid bills?
Answer: Spring is the perfect time to go through old records and shred information that is no longer needed. It’s also a good time to examine some aspects of your finances, and if necessary, clean some things up.
A good first place to start is your credit report. All consumers are entitled to a free credit report from each of the credit bureaus annually. If you haven’t done so in a while, it’s about time to check yours. Go to www.annualcreditreport.com and access your credit report from one of the bureaus. You can obtain all three or you can wait another couple months and retrieve one of the others.
Once you check your credit report, review it and see if there are any items that you need to deal with, and also check the report for errors. If there are any outstanding items you can tackle, make a plan to do so and follow the proper procedure (www.ftc.gov) for correcting any errors.
Next, review your budget. If you’re saying, what budget? Now is a good time to create one. Consider all your expenses, including ones you only pay periodically (like your water and sewage bill or car insurance). Figure out all much money you have coming in and how much money you have going out. If you need some help, use the Agency’s free online budget tool at www.onlinebudgetadvisor.com.
have reviewed or created your budget, next you might want to look for ways to cut expenses. Cutting back on spending can lead you to increasing your savings.
Have you been saving receipts and bill statements? Do you know what to get rid of and when? See the list below for what to keep and how long you should keep it. Any documents you want to get rid of that contain personal information; make sure you shred them to prevent identity theft. If you have an excessive amount to shred, keep your eyes open for a shred day in your community.
What to keep and for how long
One month: ATM printouts
One year: Paycheck stubs, utility bills, credit card receipts
Three years: Income tax returns
Seven years: Records of satisfied loans
Keep while active: Contracts, property tax records, home improvement records
Forever: Marriage license, bankruptcy papers, military discharge papers
A financial spring cleaning works the same way a household spring cleaning does…it’s a big task, but once you’re done, you’re glad you did it.
Heather Murray is Manager of Regulatory Compliance and Education for Advantage Credit Counseling Service (dba Consumer Credit Counseling Service). For more information about the Agency’s services, please visit www.advantageccs.org or to access the free online budgeting tool go to www.onlinebudgetadvisor.com. If you have money or credit management questions, you can email Ms. Murray at firstname.lastname@example.org. Please provide your name, address and daytime telephone number with all inquiries. Ms. Murray tries to reply to all inquiries but, because of the volume of questions she receives, she cannot always respond.
Category: Personal Finance