1-2-3 Paper Management for Busy People – Part 2 of 4

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This is the second of a four-part series. Click here if you missed Step 1: Sort Incoming Paper Before You Sit Down! In the coming weeks I will post Step 3: Purge and Rotate Archives and a postscript blog, Conquering Paper Mountain.

Step 2: Process and Archive

In Step 1: Sort Incoming… I provided a description of how I “catch” all paper as it comes into my house, either through the door (i.e., when I bring in the mail or paperwork from a meeting or event) or from my printer. Most of this stuff doesn’t need frequent attention – I tend to put off shredding until the file gets a little thick, and my internet to-do file contains optional things that I do whenever I feel like it. But I do – absolutely! – empty two of these incoming paper files at least two times per month: TO DO / PAY and TO FILE. In my particular situation, I spend an average of 2 two-hour sessions per month on TO DO/PAY and 2 five-minute sessions on TO FILE. Since processing TO DO/PAY generates filing, I always do it first (if I am processing them both on the same day).

I use commonly accepted document retention guidelines, for instance the one here:  record-keeping. But many years ago I got tired of paper accumulating in a dozen different folders and of having to flip through the files to clean them out, especially when I realized I needed to access these records only about 1% of the time. So I streamlined the process and pared down the real estate consumed by my files. Now (currently 2016) I have a small tote bag that holds the files I need to access occasionally through the month. I keep them in a tote bag so that I can schlep them to wherever I park myself to pay the bills.

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Income Tax 2016

The goal of this file is to provide a catch-all for the receipts, forms and other records I receive via mail or internet that will be needed to prepare my tax return next winter.

Destroy 12/2023

I refer to this as my “seven-year file.”

The only thing I put in this file, for now, are bank statements after I have balanced my checkbook. If I had other records that the retention guidelines said to keep seven years, I would put them here.

Destroy 12/2019

This is my “three-year file,” and I typically put only credit card bills here, once they are paid.

Again, this is the only thing I put in here, as I have nothing else that guidelines recommend keeping for three years. However, I already have an entire year’s worth of bank statements in this file, accumulated here back in 2012, when the file was my seven-year file.

Destroy 12/2017

Here I put receipts for purchases that have the potential for dispute or return.

I think of it as my “just in case” file and, if you were to have one, it would hold whatever “just in case” paper you are uncomfortable with discarding, at least for now. Last week I switched to a new planning calendar and put the old one in this file. And this file is pretty thick, since it already holds all of my 2010 bank statements and my 2014 credit card statements. Recently I started putting a cheat-sheet post-it in each file, since the years are flying by too quickly for me to keep track.

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Destroy When Replaced

Anything in this file simply provides a record that I am “current” with regard to these accounts and items that do not impact my taxes, i.e., the most recent …
  • 10-year driver’s license renewal notice, with notation of date paid online
  • Annual safe deposit box payment receipt
  • Annual notification of AAA club auto-payment
  • Semi-annual insurance renewal certificates
  • Bills for utilities, car loan, and HOA dues – all of which show my account status – with notation of date/check # of payment

And, because it made no sense to me to create a file for paperwork associated with these things that are billed and paid online, this folder also holds the paper contract for my gym membership and storage unit lease. My logic? When I change or cancel my gym membership or storage unit, these documents will be “replaced” by a final termination of contract.

Ongoing Projects

This file could be dangerous, since I like to start things and then forget to finish them.

Fortunately, at the moment, I have the information that I want to research about a rewards card (Plenti) I just signed up for. It is similar to the “INTERNET TO DO” file that I have for incoming paper, but doesn’t necessarily involve internet research or activity (in this case, I really just want to take time to focus and think through the information and plan how to make the most of the membership).

Finally, I have one last location for files that I need to use infrequently (or never).

These are in an attractive storage box under my dining room bench, where it can be quickly and easily pulled out and used, and a file can even be momentarily opened on the dining table if necessary. I have five categories of files in this box: Accounts, Automobile, House, Long-Term Archive, and Permanent Archive. The files in the Account section hold information about accounts, such as original agreements, not the statements (which usually do not need to be retained as long). The Long-Term Archive section has the “Destroy 12/20XX” files that I am not actively using, and they are filed next to the tax file that will also be destroyed that year, if it exists yet.

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