Being an adult has its perks . . . and challenges. When you’re little, you dream about the day you get to drive your own car, have your own house, and stay up as late as you want. But you never think about the not-so-fun parts—like paying taxes, having a tooth pulled, or getting your driver’s license renewed. Oh, and what about figuring out how to safely organize the important documents you’re supposed to hold on to throughout the years?
At some point, asking your 75-year-old mom to overnight a copy of your birth certificate just doesn’t cut it anymore. So how the heck do you know the difference between the important documents and the ones that should go straight to the shredder?
Don’t worry—we’ve got you covered. Let’s talk about which documents to protect, which documents to toss, and the why behind both decisions.
Important documents are certain legal, tax, medical, property and personal records you should hold on to in case you need to reference or use them down the road. You know, the stuff you keep around “just in case.”
You could wind up needing one of those important documents if a big life event happens, like buying a house, having a baby, changing your name, or making a will. And when one of those big moments arrives, the last thing you’ll want to do is run around the house searching for the papers you need like you’re Monty Python looking for the Holy Grail (because you probably don’t have access to the Holy Hand Grenade).
So, you need a document organizer somewhere in your home that you can easily find in those big moments. Which are the most important documents to hang on to? They include:
Overall, you should hold on to a document if you think you might need it, if it’s a personal identification document, if it’s something that has to do with your finances, or if it protects your future (like life insurance or a will).
Everything else is probably just clutter. Commence shredding! Seriously, though: Shred any document with personal information on it before you toss it in the dumpster—you never know who could get their hands on it.
We know filing digital copies of all those important documents away on a hard drive or online cloud may seem like the best option—no loose papers, no mess and no worries. But it’s almost always a good idea to have a hard copy on hand, filed safely away just in case.
For example, when it comes to your will, your loved ones could wind up with a bit of legal mess on their hands if they’re only left with a digital copy and not the original.
Plus, we’ve all heard tragic stories about failed hard drives and lost laptops. So when in doubt, print it out (and keep it filed in a safe place).
Now, if you want to file digital copies of your important documents to make them easier to access and share, that’s a great idea! Just make sure you have a paper backup.
Now that you know how to tell the important documents from the not-so-important ones, you might wonder how long you should keep them around. You also may be curious about some documents we didn’t cover above. So let’s dive in!
These days, virtually every bank in the world offers their statements online and only sends them through the mail if you ask them to. So is there any need to print out those bad boys and file them away? Nope.
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It’s important to review your bank statements every month so you can look for anything out of the ordinary. It’s an easy way to watch for red flags that could alert you to identity theft. But there’s no need to keep them afterward, especially since banks keep them on file.
With pay stubs, you should hold on to them for a year, since you might need them to provide proof of income when you’re making a big purchase or to dispute any suspicious behavior that pops up on your accounts later. After that, feel free to toss.
The Federal Trade Commission suggests keeping your paid (and undisputed) medical bills for at least one year. 1 Listen: People make mistakes. You may wind up receiving the same bill twice, or your doctor’s office may forget to bill your insurance and send the full thing to you instead.
If you have a record, then you can kindly let the billing department know they’ve made a mistake and have the proof to back it up. And if you haven’t paid or you’re disputing the bill, you’ll want to keep those records until the dust settles and everything is resolved.
You shouldn’t keep utility bills long—unless you know you’ve got a trip to the DMV coming up and need to prove your identity or place of residence. In that case, you’ll want to have last month’s utility bills with your name and address front and center. Otherwise, have fun making your own confetti with the shredder.
It’s a good idea to keep tax statements for seven years. Why? You never know when the IRS will want to do an audit, and they usually don’t go back more than six years. 2 Plus, you might find yourself buying a new house and needing to prove you’ve been responsible in the finance department. You truly never know!
What about receipts? Shred those suckers now! Unless you’re working from your home office, making home improvements, or doing anything else you might get a tax credit on, you really don’t need them. So go ahead and take that pile of receipts you’ve been collecting from your weekly grocery runs and shred them.
And just in case you’re wondering whether to keep warranty records, receipts for big-ticket items (like that new TV), and even proof of home repairs—yep, you should keep those around until the warranty expires, you sell that TV, or you move out of your house. Then drop ’em like they’re hot.
It depends. When it comes to your home, you should keep things like titles, deeds, mortgage statements and even insurance policies for as long as you own your property. And once you say hasta la vista to that mortgage payment and your home is paid off, you’ll be thrilled—but you should still hold on to those loan documents for at least 10 years.
With cars, you’ll want to keep any contract details, titles and proof of insurance for at least 10 years. The same goes for any documents related to your car loan (if you have one). Debt doesn’t often come back to haunt you, but it’s always a good idea to be prepared in case you have to deal with zombie debt down the road.
Pro tip: If you do have a car loan (or any other debt), pay it off and say goodbye for good. You’ll breathe a deep sigh of relief when it’s finally gone!
We mentioned several important personal records above. Examples are things like your birth certificate, marriage certificate, Social Security cards, retirement accounts, life insurance documents, will and powers of attorney. You need to keep all of these things—forever.
Your birth certificate, marriage certificate and Social Security card matter most when you’re alive. But your loved ones will need easy access to your will, powers of attorney, living will and life insurance policies (like term life and disability) after you’re gone—or if there’s ever a time you can’t speak for yourself.
When it comes to the documents your family will need to access after you die, keep them all in one place and let your family know where they are. You don’t want to send them on a scavenger hunt at a time like that.
