Stop the Paper Madness (a filing system that works!)

The sooner you are going to admit that your papers are in disarray, the quicker you can get them organized...and it only takes a day of your time....at most. If you already have a system of filing your important bills and papers, then go ahead and skip to the next article. If you are like I used to be, "paper challenged", then read on.


The first thing that you are going to need to do is to invest in a sturdy, deep, four drawer file cabinet. If you can't afford that right now, then go ahead and get two, two-drawer metal cabinets. We move a lot, and I learned the hard way that those flimsy two-drawers can't take the punishment. If you don't want to invest in a new cabinet, you can also check yard sales, estate sales and even Goodwill...I've seen them myself at all these locations.

You are going to invest in packages of those hanging file folders with the removeable tabs. They are just neater and look more organized than the plain vanilla manila ones. Plus you can stagger the tabs like you want. I recommend getting them from one of those warehouse stores, such as Costco or Sam's, as they can be cheaper there.

The top drawer is JUST going to be for bills, bank accounts and investments, nothing else! So, as an example, you are going to make a folder for "Citibank", "Verizon", "Charles Schwab" etc. If it's easier for you just to label "bank", "phone" and the like, that's fine...just use words that you can easily identify with....don't write "cell phone" if you use the phrase "mobile phone". Now go ahead and put them in alphabetical order and stagger the tabs. After you pay your bills every month, the statement goes in the file. I also put my credit card receipts in the appropriate file after they have been reconciled with our monthly statements. Every few months, I will then go through that stack of receipts and shred them. The only time to hang onto a receipt is if it is a warrantied item or an item that you are tracking as part of your property inventory.

I like to keep two binders on top of my file cabinet. In one, I have tabs for each bank account. Every time I get a statement from a bank, I punch three holes, reconcile the statement (either through Microsoft Money or on paper) and put it in the binder. Only keep the last twelve months worth of statements in this binder. The other binder will contain your investments. Label both binders or make them each a different color. Again, have a tab for each investment company. Only twelve months worth will go in here. Because I am still somewhat of a paper hoard, after I have a year's worth of statements, I alligator-clip them together and put them in the file cabinet in the appropriate file. I tend to shred them after three years. I do hang onto all the investment statements, just in case I sell one and have to figure out the cost basis. As a sidenote, most brokerage and investment companies do this for you...but again, I think I do this because it gives me peace of mind.

The second drawer will have all your other papers for your family...everything except your originals and copies of official vital records, insurance policies, any property inventories (with saved receipts of valuables), savings bonds, last three years worth of tax returns, wills, powers of attorney, deeds, car titles, warranties, mortgages and official school transcripts. These very important documents will go in a small fire proof safe, which I will talk about at a later date.

To give you an idea of what I put in our second drawer, here are some examples:

• Van (all service records and original purchase paperwork)

• "Car #2" (same)
  

• School "Child #1 (all report cards, except the final official one and others deemed important; do one for each child)

• Rental House #1 (all the receipts and papers, to include the lease agreement; I also like to scan the signed lease agreement and save it in our computer)

• Tax deductible (anything that might remotely be tax-deductible at tax time gets put in here)

• Health Records Pet #1 (do one for each pet; I also put boarding receipts in there)

• Yardwork (I put phone #s of yard people, yard ideas and things like that in here)

• Rewards Programs (every airline and hotel reward program card goes in here, along with statements, deals and such)

• Hotel & Car Rental (I always like to compare what I paid last time)
  

• Moving Claims (I just hang onto these for future reference and also to keep track of how many pounds we moved with the last time)

• Moving Checklists (before we move, I make a checklist of every account we have to close and every subscription that has to be changed, along with some other checklists...they all go in here between moves and get updated after every move)

• Health Insurance (for statements from your insurance provider and any other important paperwork you get from them)

The third drawer is my husband's drawer. He has everything in there from some old school papers, to his stamp collecting stuff to military stuff he wants to hang on to. I told him that all his stuff must fit in this drawer...I get him to practice the "one for one exchange" if the drawer gets too full. He must get rid of something in order to be able to add something.

The last drawer is my drawer. I have folders for some of my hobbies and interests in my drawer too. I have to follow the same rule and have never run out of room:-))

Now look on the floor...you should have a pile of papers that doesn't belong anywhere. If it's something you no longer need and does not have any personal identifying information on there, go ahead and throw it away. If it has your name, address, SSN or anything sensitive, you're going to have to shred it. When I did this exercise myself a few years ago, I just committed some time and trashbags...and just shredded. Get a good sturdy shredder, and you won't be sorry.

If you have been saving your kids' artwork in your files, please see my article on "Preserving and Taming Your Child's Artwork".

That about wraps it up. If you've got an idea that works for you, we'd like to hear it!