Depending on the type, amount and reason for the purchase, they may be necessary for insurance- and tax-filing.
Where to Keep Them
Once you’ve figured out which papers to keep, you’ll need to decide where to keep them. Here’s a look at your options, which offer some trade-offs between security and accessibility. Be sure to tell a relative or family friend where you keep this paperwork.
Safe-deposit boxes. Generally, it’s one of the safest places to keep your most important original documents, especially the ones that aren’t easily reproduced and the ones you’ll keep for years.
The downside: Rental fees and access only during bank hours. Your state law may require a safe deposit box sealed at your death, which could make it a questionable choice for some important documents, such as your will.
Fireproof home safes. A safe in your home gives a measure of security along with 24/7 access. Over time, it may be less expensive than a safe deposit box; but it isn’t as secure, either. They may be a good choice for things you want to keep both secure and accessible, such as passports and Social Security cards.
The downside: Levels of fireproofing vary. The safe could be lost in a flood, tornado or hurricane — and aggressive thieves can cart off the entire safe.
Home filing cabinet. This
is a reasonable choice for things you need to access regularly or don’t need to keep very long, such as pay stubs, payment receipts, bank and credit card statements.
The downside: Not very safe or secure. If it doesn’t lock, your files are wide open to both thieves and nosey visitors.
The web. By creating images of key documents and uploading them to an online storage site, you give yourself access from any computer. That could be a lifesaver if you’re away from home or your entire community is devastated by a disaster. Be sure to use a common file format so that you can easily recover the documents. Also use online storage as a backup to a local copy, perhaps on a portable drive. Keep in mind that sometimes only the original document will do.
The downside: You could face monthly fees and potentially put your sensitive information at risk. Encrypting your files and folders helps prevent unwanted access to your information.
Automate and Go Green
Reduce future clutter — and save some trees — by going electronic.
- Arrange for utility and other bills to be sent by email.
- Pay your bills electronically.
- Use a scanner to replace key paper documents with electronic versions. Be sure to create a backup file that’s stored in a separate location.
Category: Personal Finance