52 Weeks of Organizing – Week 6 – Filing … And Beating Back the Paper Monster

Beat Back the Paper Monster!ūüď•ūüóĄūüėą

It’s Week 6 of the organizing challenge … I’m not sure if I feel like the year is going by fast or slow … but here we are nonetheless! ¬†Week 6 keeps us in the home office realm. ¬†Hopefully last week you were able to cut down those piles of paper! ¬†This week we are gong to set up our files, and deal with the filing portion. ¬†This is the last week we will deal with paperwork, but you will need to put paper work on your weekly list of chores to maintain the system.

Welcome to the 52 Weeks of Organizing Challenge! This is Week 6 in the series! Please note that these weeks are not built on one another and you can start at any time! It’s never too early or too late to begin organizing!

Last week, I asked you to sort through your piles of paper and sort them into Recycling, Trash, Shred, Urgent, Taxes, File, and Action.  You should have dealt with the Recycling, Trash, Shred, and Urgent piles and just have papers left in the Taxes, File, and Action categories.  You should also have set up a mail/incoming paperwork area and have files/bins/baskets (whatever you decided on) for All the people in your home, your business (if applicable), Action, and Filing.  This area should also include a recycling bin/shredder/trash (one or all may be applicable for you), and an area that includes things like stamps, envelopes, and other items to deal with outgoing mail.

This week we will set up systems for filing.  Please note that if you have a business, a discussion with your tax professional is recommended on what to keep and how long to keep it.  I do recommend that for all tax items Рno matter if you are a business owner or regular tax filer, keep all tax documents for a single year together and label them on the top with the year.  This way, it is easy to see what year is included, and once you do not need records for that year it is easy to grab and shred all items.  For instance, my tax professional recommends that I keep all taxes for 7 years, so once my taxes are filed for the year, I count backwards 7 years and pitch the ones older than that.

Again, you will want to ask your tax professional what items you need to keep, and for how long you need to keep them, however I recommend at least that you break your tax filing into 3 categories – Income, Expenses, Deductions … and if you have lots of medical expenses, have a separate file for them. ¬†If you are a business owner, your tax professional may ask you to break down your expenses further into categories, such as COGS, Inventory, Advertising, Office Supplies, etc. ¬†And, if you run multiple businesses you may need to break your income into files for each income source.

For household filing and record keeping generally people tend to keep more statements and records than are necessary.  For bills and bank statements, generally once you have verified that the statement is correct you do not need to keep the previous month statement.  If you are disputing an item for a bill or statement, then you do need to hang on to that item and any documentation until the dispute has been rectified.  The only exception to this is if you are planning to make a large purchase in the near future, such as a home purchase or refinance, in that case, it is a good idea to keep anywhere from 2 months to 6 months of statements.  You can ask your mortgage lender what is a reverse mortgage and how many they will request.

For insurance, you only need to keep your most recent policy.  It is a good idea to keep this policy in the household binder that we set up back in December.  You can see that post here.  You can also keep items like warranties for large purchases, deeds and titles, immunization records, and other important documents in this household binder.  This binder is set up to be the one important thing that you grab in the event of an emergency.  It should be stored somewhere that is easy to get to, but out of sight.

Other items that end up in filing are children’s items. ¬†School work, report cards, projects, and awards. ¬†Generally it is a good idea to dedicate one file box per child, and you may be on track to have a complete 4 drawer filing cabinet for each child. ¬†Mother’s (and some Father’s, Grandparent’s, and Guardians) find they have a deep emotional attachment to any thing their child brings home, especially during the preschool years when children are extremely proud and excited about what they have made. ¬†You will have to decide how much or how little you are willing to keep, but just consider what would happen if your parents, grandparents, guardians, and other special people in your life suddenly returned everything you had made or given them to this point in your life. ¬†How much stuff would that be, where would you store it, and would you have time to look through all of it. ¬†There are certainly awards and pieces that are worthy of keeping, such as if your child was accepted into a prestigious academic program, or if your child received a top honor like their Eagle in Boy Scouts. ¬†However, most employers and colleges (and grown children) are probably not going to care about the 30 pieces of macaroni art they made when they were 3… Now some rodent friends living in your attic or basement may very much appreciate if you keep the macaroni art, but that might not be the attention you would like to attract!

The following is a list of my personal filing folders, I have two separate two drawer filing cabinets that hold all of this.  One file cabinet is completely full of taxes, and the other is mostly full of things for our 3 boys.  You will also notice that I have two binders listed below РI split up my home binder into two parts and a general list of what is included in each is below.

  • Taxes for 7 years
  • Current year tax items
    • COGS
    • Income
    • Expenses
    • Deductions
  • Children/Adults – awards, keepsakes, etc
  • Home information – house plans, survey etc
  • Home¬†Binder – Titles, SS cards, Birth Certificates, Warranty Information, Medical and Insurance Information.
  • Bill Pay Binder – Statements for all items that are paid monthly

Back to the piles …Now it is time to work through the piles you have left from sorting last week. ¬†After reading this, hopefully you are realizing that you can further reduce the filing pile. ¬†Filing systems should be simple and easy to find things. ¬†Having a bill pay binder has reduced greatly the amount of things that actually make it into my filing pile, and I can also quickly find all necessary tax paperwork. ¬†Having a household binder has also made simple things like signing my child up to play baseball, easy since I no longer have to search through large stacks to find a birth certificate or most recent immunization reports.

This week you should work through all of your filing, taxes, and action piles.  You will also need to designate a time each week to empty your mail station, pay bills, and file.  This will prevent the stacks of paper from forming in the future, and your tax professional will thank you!

I hope this has been helpful for you!  Due to the sensitive nature of this topic I have decided not to include lots of pictures, but if you are curious, please leave me a comment or let me know, and perhaps I can revisit and revise this with pictures at a later date!

Thanks,

April

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