30 May Financial Documents: Keep or Throw Away?
It is often difficult to know which financial documents you should keep and which ones you can throw away. Some people keep documents that they don’t need for far too long and others don’t keep them long enough. A lot of people just keep everything because they have no idea whether or not they will need them in the future.
Nobody has the storage to keep every single financial document for years; that pile would be huge. So, we’re here to help. We are here to tell you that it is okay to throw financial documents away as long as it’s the right document. With this list, you’ll never question what to keep and what to throw away (after a certain amount of time) again.
What to throw away:
- Receipts: You don’t have to keep them forever but it is suggested to keep them for about 3 years especially for the things that you’re going to put on your tax returns.
- Credit card statements: You should keep these statements until the charges are confirmed and you have evidentiary support that you paid your balance.
- Tax returns: The IRS wants you to keep these documents for 3 years after the date you filed the return. After that, get rid of it.
- Pay stubs: Pay stubs need to be kept for one year until you receive your W2 form and you can verify that the information matches. Once you verify the correct information you can trash your pay stubs.
What to keep:
- Bills: You need to keep the bills for big purchases like cars, houses, and jewelry forever.
- Life insurance policies: You should never ever throw away your life insurance policy. This needs to be kept forever.
- Household inventory: Any documentation of money that you have put into your home needs to be kept forever. It is especially important for when you are selling your home to have proof of all of the investment you put into your home.
- Education records: This includes loans, tuition payments, etc. You spent a lot of money on your education and you want to keep all of your documents just in case something were to come up where you had to prove that you spent the money that you did.
It is important to know what you can keep and what you can throw away. However, you also need to know how long you should keep a document before you trash it. Whenever you’re unsure, just remember this list.