How long should I keep this?  – A guide to receipts, statements and financial clutter at home

How long should I keep this? – A guide to receipts, statements and financial clutter at home

How long should I keep this? – A guide to receipts, statements and financial clutter at home

In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But how long should you keep all those receipts, bank and credit card statements and other financial documents? Below is convenient In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But how long should you keep all those receipts, bank and credit card statements and other financial documents? Below is a handy reference you can use to tackle your home paper trail.

Toss after one month

ATM and bank deposit/withdrawal receipts

  • keep in a file folder until the monthly statement is received
  • reconcile with your statement to ensure charges and payments are processed correctly
  • if for a large warranty purchase, staple the receipt to the owner’s manual and file for the warranty period
  • if for a large out-of-warranty purchase, keep the receipt if the cost to replace an item is more than the deductible on your homeowner’s insurance policy
  • if for small purchase without warranty, shred

Cash purchase receipts

  • enter your checkbook or computer software to make sure you keep track of all your purchases
  • if for a large warranty purchase, staple to the owner’s manual and file for the warranty period
  • if for a large out-of-warranty purchase, keep the receipt if the cost to replace an item is more than the deductible on your homeowner’s insurance policy
  • if for small purchase without warranty, shred

Credit card receipts

  • keep on file until monthly statement is received
  • reconcile with your statement to ensure charges and payments are processed correctly
  • if for a large warranty purchase, staple to the owner’s manual and file for the warranty period
  • if for a large out-of-warranty purchase, keep the receipt if the cost to replace an item is more than the deductible on your homeowner’s insurance policy
  • if for small purchase without warranty, shred

Discard after one calendar year

  • Monthly bank/financial institution statements (unless required for home business)
  • Brokerage/Mutual Fund Statements (Monthly/Quarterly)
    • reconcile with your annual report
  • Monthly credit card statements
  • Credit reports
    • you should request your credit report each year to ensure that all information is accurate and up-to-date, especially regarding accounts you have closed during the year
    • requiring this file annually helps prevent identity theft so you can see who requested the report and for what purpose
  • Monthly mortgage statements
    • reconcile with your annual report
  • Payment receipts
    • shredding after reconciling with your W-2 or 1099 (US) or T4 (Canada)
  • Telephone/utility bills

Keep for 7-10 years

  • Any T4 forms – including T4E and more. (Canada)
  • Annual mortgage statements
  • Supporting documentation (canceled checks/receipts/statements) for tax returns, including but not limited to:
    • donations
    • retirement account contributions
    • child care receipts
    • alimony/child support paid or received
    • medical expenses
    • mortgage interest
    • property tax payments
  • Forms W-2 or 1099 (US)
  • Annual credit card statements (if provided)
  • Annual utility company statements (if provided)

Save indefinitely

  • Adoption records
  • Information about the Auto/Home/Life insurance policy.
    • keep records of purchases while the policy is in effect
  • Vehicle records (certificate of title/registration)
    • store while you own your vehicle
    • if annual registration is required, keep only current registration paper
  • Birth certificates
  • Business income tax returns and supporting documentation if you are self-employed
  • Death certificate
  • Divorce Settlement/Child Custody Orders
  • Investment records clearly showing beneficiary information
    • purchase records
    • sales records
  • Wedding contract
  • Medical documentation
  • Child Immunization Records
  • Military card
  • Pension plan records
  • Receipts for major home improvements/repairs
  • Receipts for large purchases that have a long life (fridge, stove, freezer, vehicles)
  • Religious records
  • School/Educational Records
  • Tax refund
    • In the US, the IRS has 3 years from the date you file your tax return to check your return for errors and up to 6 years to check your return if it suspects you have understated your gross income by 25% or more. There is no statute of limitations for an audit where intentional fraud is suspected.
    • In Canada, the CRA advises you to keep your tax returns, notices of assessment and all supporting documentation for 6 years from the date you file your personal income tax return.
    • NOTE~I recommend keeping them indefinitely because they take up little space and can often be a valuable resource if there is a dispute about things like income tax paid, alimony/child support paid or received, and pension benefits.
  • Will and/or power of attorney
    • must be kept securely in a fireproof home safe or safe deposit box at your financial institution
  • Year-end investment account summaries

Now what?

Now that you know what to keep, where should you put it?

Create a simple home backup system to cover the basics and invest in a few sturdy cardboard or plastic boxes to back up information you need to keep long-term or indefinitely.

And a final warning – when you decide that you no longer need to keep certain documents, be sure to shred them and DO NOT throw them in the general trash or recycling. Sensitive financial or personal information should always be DESTROYED to avoid any chance of identity theft, which can lead to headaches bigger than you can imagine.

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