Posted by Lending Club :: April 14, 2009 @ 6:55 am

Paperwork: it would seem that in a world that is becoming increasingly paperless keeping important documentation should be getting easier. Keeping good records still remains an important part of managing your personal finances, and knowing what to keep and what to get rid of will make your life much easier in the long run.

Things to keep

You can possibly save yourself a lot of time and headache by keeping the following important paperwork well organized and easily accessible.

• Pay stubs. These pesky little pieces of paper can really add up however you would be well served to keep track of your pay stubs at least until the end of the year to confirm the amounts match the totals on your W2. In addition you may find you are asked for proof of income for various applications and having your pay stubs organized can make the process much easier.
• Tax returns. It is recommended that you keep tax returns and supporting paperwork for at least seven years from the date the original return was filed.
• Real estate documents. If you own property you will want to keep your titles, deeds, appraisals and property surveys in a safe location for easy reference.
• Estate planning. Your will, living will, durable power of attorney, life insurance policies and final wishes should be stored in a safe place.
• Retirement documents. Keep track of your pension, profit sharing, 401(k), IRAs and nondeductible contributions as well as annual statements you receive for each of these plans.
• Personal records. You should keep and file any personal records pertaining to military history, separation or divorce, insurance policies and any death benefits that may be due to you.
• Children's records. Until your children reach adulthood it is important to keep track of their personal records including birth certificates, life insurance policies, medical history and any other documents they may need in the future.
• Investment documents. Keep confirmations to show when you have bought and sold stocks, at what price, as well as what the commission charged was. Statements showing gain or loss should be kept for seven years after you file your tax returns.
• Receipts. For major purchases such as jewelry, furniture or items under warranty until the warranty expires.

Things you don't need

You can feel confident in properly disposing of the following types of paperwork (shredding financial documents is the safest way to keep your information safe).

• Brokerage statements. You can toss your monthly or quarterly brokerage statements if you have an annual year-end statement that summarizes your yearly transactions.
• Monthly bills. Some people prefer to keep utility and other monthly bills for reference, but this can quickly result in an overwhelming amount of paperwork. Realistically, once you have paid the bill and the checks have cleared you likely do not have to keep the paper statement.
• Canceled checks. You need only save these if you are required for tax purposes.
• Bank deposit and ATM receipts. Once you have confirmed your deposits have posted and recorded ATM withdrawals, there is really no need to hold on to these little bits of paper.
• Offers of credit. You definitely don't want pre-approved credit offers falling into the wrong hands. If you are not accepting the offer, shred the information to ensure it doesn't fall into the wrong hands.

It is important to find a system that works for you. Invest in a fire-proof safe where you can keep all your financial records safe and secure, and organize them in a way that you can find the information you need easily should the need arise. For certain legal documents such as your will or estate planning, it is wise to consider having a copy of the original documents held by a third party such as your attorney or in a safe deposit bank.