7 Tips to Help You Organize Your Important Documents

Document storage and organization are essential skills to keep a clean home or office. Important documents like identification and financial paperwork need to live in a safe place, while junk mail should be thrown out or shredded as often as possible. Digital copies can help save physical space and reduce the clutter in filing cabinets and desk drawers.

As we go through life, we collect a lot of paperwork. There is much to sift through, from identification to mortgages and banking statements. But what happens when all those items take over our kitchen counters, filing cabinets and desk drawers?

One of the most critical parts of adulthood and professional life is knowing what documents to keep and which to toss out or recycle. Streamline the process of sorting paperwork and keeping it organized in (or outside of) our homes.

1. Be Aware of Which Documents Count as “Important”

How can a person figure out which documents are “important” enough to keep? The answer differs from person to person. But among all households and businesses, certain types of paperwork require careful storage and organization. Some of the most critical documentation to keep handy include the following items.

Vital Records

Vital records are documents that a person needs to enroll kids in school, apply for passports or claim benefits. They include birth and death certificates, marriage licenses or adoption paperwork. 

Passports and Identification

Passports are necessary for international travel, but they are also valid proof of identification for domestic flights. Companies often use social security cards to verify employment eligibility and provide proof of citizenship. Keep these items in a safe place when not using them.

Wills and Deeds

Legal documents such as wills and property deeds can help distribute assets in the aftermath of an unfortunate accident or tragedy. Keep these documents in a safe place, either a fireproof safe in the home or a safe deposit box in a bank.

Medical Records

Medical records that detail the results of an annual physical exam or any existing health conditions can be helpful when applying for certain healthcare benefits or as a person ages.

Insurance Policies and Related Paperwork

We buy many types of insurance throughout our lives, from home and auto coverage to life insurance to help protect and provide for families after a loss. Having convenient access to these policies makes filing claims significantly easier.

Financial Paperwork

Keeping annual tax returns, stock certificates, retirement plans and other types of financial statements is vital for several reasons. An organization may ask for these items as part of a loan application. The IRS may need them if they choose to perform an audit of a person’s tax returns.

Employment and Educational Paperwork

Most of these documents fall under the above categories but keeping track of essential items like workplace policy handbooks and education transcripts can save a lot of headaches if an organization or institution asks for them, such as when applying for a loan or attending graduate school.

Vehicle Information

These documents include vehicle registrations, maintenance and repair histories or licenses to operate specific vehicles. Keeping these items close is handy if someone chooses to sell the car and needs proof of ownership.

Passwords

A single storage place for passwords can help reduce the risk of identity theft or data loss. Keeping all passwords together can minimize disruptions if a person forgets login information. A list of passwords also comes in handy in case the account owner dies or is otherwise incapacitated and someone else needs access to those accounts.

Home Documents

Most home documents fall under the deeds, insurance and financial records categories. Keep any warranty information, owner manuals, maintenance checklists and even a list of all the valuable items in the home. This also includes any repair information for major appliances, which may stay with the home if a person decides to sell them.

2. Know How Long to Keep These Files

It may seem obvious, but certain documents should stay in a person’s possession forever. Others, not so much. The trick is to know which items to discard after one year and which ones to keep for longer. The following categories can help reduce any confusion.

Documents to Keep Forever

Financial experts recommend keeping documents like tax returns forever. Other financial documents a person should hold include any record of a significant financial transaction, like a legal filing or an inheritance. Other items to keep forever include:

• Birth and death certificates
• Social security cards
• Marriage licenses
• Divorce paperwork
• Military discharge documents
• Life insurance policies
• Wills and living wills

Documents to Keep for Three to Seven Years

A person should hold onto tax returns in perpetuity. Supporting documentation for them like W-2 forms, brokerage statements, bank statements and other relevant paperwork should stick around for three to seven years. Other items to keep this long include settled insurance claims or deeds for sold property.

Documents to Keep for One Year

Monthly bank and credit card statements fall into this category, as do any pay stubs. These can be either digital or hard copies.

Documents to Keep for One Month

Any utility bills, bank deposits or withdrawal slips are usually only good to keep for around one month. The only reason to keep them around is for self-employed individuals or contractors who may want to write these items off for tax purposes.

Unless a retailer asks for physical receipts as part of their warranty policy, toss them out after reconciling the purchase with bank statements.

3. Separate Files into 5 Categories

What happens when paperwork and documents accumulate into a giant mess? It is time to dig through and organize. Start the process by collecting everything into one spot for sorting purposes. Sweep through filing cabinets, desk drawers, kitchen counters and anywhere else these items can pile up. Once everything is in one place (like a large table or the floor), it is time to divide and conquer.

According to storage and organization experts at The Spruce, separate papers and documents into five categories: action, archive, household, recycle and shred.

• Action: These papers require immediate attention before discarding. The documents in this category include invitations, appointment reminders, parking tickets, homework and bills.
• Archive: If a document needs to stick around but is not referenced more than a few times a year, archive (store) it. Tax returns and medical records fit in this category, as do warranties, contracts, deeds and leases.
• Household: Anything a person uses to keep their house in order gets put in this pile. These documents include coupons, recipes, user manuals, travel documents or receipts for the current year’s taxes.
• Recycle: Anything that does not fit neatly in the above categories typically falls under the recycle pile. Junk mail, envelopes, newspapers and magazines are often recyclable.
• Shred: If a person does not need to save paper mail but does contain personally identifiable information — such as bank statements, credit card offers or bills — they should shred it.

Clear out space by recycling first, then shred sensitive documents. Most office supply stores offer bulk shredding services, so take advantage of this if the “shred” pile is massive. 

4. Decide Where and How to Store Your Files

Deciding where and how to store all remaining “archive” paperwork may feel like a hassle, but there is a way to simplify the process. Important documents — like passports, insurance, real estate and car ownership information — often end up in fireproof boxes or safes.

A small filing cabinet or drawer with dividers makes sense for everything else. Purchase some labeled file folders from the office supply store after dropping off documents for shredding. Then spend some time labeling and sorting everything out.

For business paperwork or people with significant document storage needs, finding offsite storage — such as a nearby self-storage facility — can reduce the amount of paperwork in their homes.

5. Shred Unnecessary Paperwork Often

Forgetting about archived paperwork that a person no longer has useful can quickly clutter up an office file cabinet or desk drawer. Spend time going through the file folders or safe each month and shred the out-of-date documents. For junk mail like credit card offers, immediately shredding them saves time and space.

6. Go Digital

If physical document storage feels overwhelming and unnecessary, there is always the option to go almost entirely digital. While some items like passports cannot (yet) live on phones and hard drives, it is possible to scan many items as PDFs and dispose of the physical versions.

In many cases, scanning documents no longer requires a heavy dedicated device. Mobile phone apps allow users to snap photos of documents and convert them to PDF at the touch of a button. They can then upload the documents to the cloud or save them locally on another device.

One of the best ways to avoid unnecessary physical paperwork is to eliminate it in the first place. Request eStatements for banking statements, credit cards and utility bills whenever possible. Some companies even reward customers for transitioning to digital communication with lower bills. 

7. Cut Down on Paper Mail

Signing up for eStatements and other electronic communications can reduce the amount of paper mail that enters a home, but so does eliminating physical magazine subscriptions. Many publications charge significantly less for digital access to their articles, which a person can read on their mobile device or in a web browser.

Final Thoughts on Document Organization

Finding a tried-and-true method for document organization differs from person to person, but everyone can benefit from reducing the clutter of unnecessary paperwork in their homes. By knowing when and how to dispose of documents properly, we can clear up some space in our homes and have peace of mind about finding the documents we need in the future. 

Top Takeaways

7 Tips to Help You Organize Your Important Documents

• Document storage and organization methods vary from person to person.
• Important documents like passports and social security cards should live in a fireproof safe or lockbox.
• Disposing of documents like pay stubs and bills can reduce clutter in filing cabinets.
• Shredding unnecessary paperwork is essential for protecting your identity.
• Creating digital versions of documents saves space in the home or office.

(Reporting by NPD)