I need a filing system. please tell me about yours

In My Humble Opinion
1

OK. I’m 43, getting married, and it’s time to get affairs in order. Need to upgrade my filing system. I do have a system now. It’s called “Just don’t throw anything out.”

I realize that I’m disorganized because I don’t have a method for how to organize my paperwork. I’d love to have an idea what to do with the paperwork besides throw it on the pile.
The primary goal of the filing system is ease of filing US income taxes. secondary goal is reference/ saving important documents.

It’s easy to start with sorting visually - all the phone bills go together, etc. After that I run out of direction quickly, and run into questions.

Do I primarily sort by year? So have a 2008 file, with all bills, documents, receipts from then?
or sort by content - have a ‘Utilities’ file with all documents & bills in that category.

It seems that for tax filing purposes, I’m better off sorting by year. But not everything should be split up by year, like academic records or medical records, and they’re not particularly tax related anyway.

then there are things that are partly tax related. Say I had a big construction project spanning a couple years - I like the idea of having one file for that, including financial documents like expenses, but also nonfinancial ones, like building plans. And the project could span multiple years. ugh.

Similar situation with an injury I had a few years ago - the paperwork was daunting - financial documents, medical, legal, insurance. etc. To have a big “injury” file, means that the medical records from that aren’t combined with general medical docs.

Lastly I’d like to be more organized in tracking spending - I generally save receipts, but don’t really know what to do with them later. There’s a lot of duplicated info - a purchase could show up in my checkbook, on a bank statement, and via a saved receipt. What’s a good simple system that lets me easily tally up my spending at the end of the year? I’m starting to think receipts aren’t that important, except as a backup, if I can get all my spending info off my bank statements.

thanks for your suggestions.

(I can’t believe I never learned about this, and why the hell wasn’t it part of my high school education. Someday I’ll put together that rant wondering why the really brainy kids don’t have to show proficiency in basic life skills the way the dumb kids do)

2

I would suggest purchasing a two-drawer filing cabinet if you have space for it. Then file everything where it logically goes, and pull them out of the appropriate files when needed for tax or insurance purposes. Of course there is a lot of leeway in this. Our system looks something like this. (The CAPS are a hanging file, with individual folders inside labelled with the other headings.)

INSURANCE
Car
Health
Life
Travel

IMPORTANT DOCUMENTS
Birth Certificates
Marriage Certificate
Old Passports

MEDICAL
Blue Mood
Blue Man
Blue Girl
Blue Boy

UTILITIES
Electricity
Water
Council Tax
Landline
Mobile Phone

BANKS
Best Bank
Worst Bank
Middle Bank

TAX
Receipts 2007
Receipts 2008
Receipts 2009

APPLIANCES
Warranties
Manuals

TRAVEL
Maps
Frequent Flyer Programs

Etc. It’s amazing how easy it is to do paperwork once you’ve got the system set up. Just buy a box of those hanging files and a couple of boxes of the file folders, label them, and you’re set! It’s not as complicated as it sounds. Think broadly of which categories you’d like first, then make up more as you go.

3

http://www.filesolutions.com/

I bought their Home Filing system after walking past it at the Container Store for many weeks. “I can buy folders and stickers for less than that!” And you can, of course, but their categories make sense and the system was quickly implemented. One Sunday afternoon (and evening - let’s be frank) and it was essentially done.

Unlike every self-styled previous attempt with this sytem I did not end up with one third of my accumulated pile in a box labeled “Misc.”

The way I do it is a hanging folder for “Telephone Bills” and file folders inside it that say Telephone 2008, Telephone 2009 etc.

Receipts I keep by month unless it’s for a purchase major enough to have it’s own file and that’s where that goes.

I couldn’t agree more that this sort of life skill would have served me much better than the semester of badminton I took, or the french I forgot the second I finsished taking the Regents exam.

4

I agree with the suggestions for a two-drawer filing cabinet and hanging folders. I would also recommend getting coloured file folders.

What Mrs Piper and I do is use the top drawer for things that need monthly attention, and the bottom drawer for things that we may need to lay our hand on in a hurry, but usually not very often.

In the monthly drawer, we divide the files into two categories: income/assets, and bills. We use a different colour for each category. So you might want to use green folders for all your income/assets, and red for all your monthly bills.

We’ve never needed to go back to a bill or a bank statement that’s more than a year old, so each month, as we do the bills and stuff, we put the new bill/bank statement at the front of each folder, and take the year-old one out from the back and shred it. So last week, when we paid all the bills for June 2009, we took out and shredded all the bills/bank statements for June 2008. That way, we don’t have to make a new set of folders each year, and we’re regularly throwing out the old stuff so it doesn’t accumulate.

The one exception is that we make a new income tax folder for each of us at the beginning of each year, and all income related stuff (wage slips, tax slips, charitable/medical receipts) we file as they come in. That way, in April when we do our taxes, almost everything we need is there in the file folders - just need to plug it into our tax software and bob’s your uncle. Then, once we get the tax assessment for that year, we move the folder down into the bottom drawer for long-term storage, since Revenue Canada recommends you keep your tax stuff for seven years. Since we’ve been doing this system for more than seven years, that means that as we move last year’s tax folder down, we take out the one from seven years ago, and shred it. Again, that keeps anything from building up.

In the bottom, long-term drawer, we keep things that we may need to find in a hurry, but not every month - medical records, house records, insurance, car info, bills for major purchases, etc. Once a year, usually in January, we sit down together and go through each of those folders, throwing out whatever we think we won’t need. Those folders are a third colour, not the same as the monthly asset/income or bills.

Once you get a system like this up, you only have to make two folders a year, for your income tax, and you’ll be throwing out the stuff you don’t need on a regular monthly basis (for bills/bank statements), yearly for income tax. That way, you won’t have stuff accumulating endlessly.

Would also recommend a good shredder, from Staples or Office Depot. Bills and bank statements are the life-blood of identity thieves. And, if you go the colour coded files route, I would recommend a Dymo labeller, since black or blue pen doesn’t show up easily on coloured folders.

5

Mine’s easy.

Top file drawer- hanging files with all the people I pay, things I need to keep (medical stuff, kid stuff, legal stuff, copy of trust), etc, in alphabetical order. Bills, etc, are for the current year.

Next drawer down- previous year’s stuff from the drawer above. Not everything moves down every year- tax stuff, legal stuff, kid stuff, etc, stays up top.

In garage- 3rd year back, in a box, labeled.

So, 2009 in the top drawer, 2008 in the second drawer, 2007 and back in a bin in the garage.

6

AFS system.

7

I see a lot of stuff in the above posts you maybe don’t really need to keep. I understand from what I’ve seen on the tv, and what I’ve read in passing, that we tend to keep papers way too long, and that we keep other documents the have no value.
What I’d like to see, along with the excellent filing methods described above, would be a comprehensive list of what to keep, for how long, and what to toss.
I do my taxes online with Turbo Tax and store all the info on CDs. Why should I be printing it all and keeping all that paper?
BTW; I realize there’s better storage media than CD. I’m looking into that.
Looking (just now) at my file cabinet, it seems the few things I should keep on paper (Will, Title, other stuff?) would be better kept in a safe deposit box at my bank, leaving my file cabinet for product manuals and such.

8

I don’t keep phone bills, utility bills, cable, etc past the current one if it shows my account is paid and up to date.

If the one you just got in the mail says, for example:
Previous month - $0.00 or

Previous balance - $78.42
Payments - $78.42

Total current due $50.39

No need to keep it anymore. At least this is my understanding. I have a folder with pocket dividers I keep for the current year. The front one has all those of which I just keep the current bill. Put the most recent in, shred the previous. Although this probably only works if you pay everything off.

9

Not everyone likes it, but bank statements, bills, IRA/retirement documents I can get online from my bank, etc. I don’t need to keep any of them. When I get my first tax paperwork of the year I get a large envolope and label it “Tax 2009”. Once taxes are done the copies of the forms go in the envolope, and it gets put away in the storage room. Even tax stuff I could regenerate from my bank(1099), company(W2), and turbotax.com. All of it is online.

Medical is in a fire safe in the closet. My medical folder is almost empty where my wife has 3 CDs, plus several inches of paper. Copies of both are also at my parents house. These would be the hardest for us to get copies of if something happened.

Why does everyone seem to keep product manuals? Maybe it is just me. My car manual is in the car, and that is the only one I keep.

-Otanx

10

Everyone!

I actually refer to some of my product pretty often, although you can download most online. I looked at the one just the other day because I forgot how to use the “clean” function. I’ve also used the ones for my cameras. And my coffee roaster. Also good recipes for cooking appliances.
Oh yeah, I’d also forgotten how to program message center on my wired phone, but that’s about to go away. I never answer it, I only use it to take messages.
Lots of reasons, eh?
Most paper I shred. Bills I pay online.

11

It’s good to keep wills and titles in a safe deposit, but only if you make arrangements for someone to be able to get at them in the event of your serious injury or even death. It can cause a major problem if your executor knows he/she is the executor, and that the will is in your safe deposit, but doesn’t have a power of attorney to access it.

12

My general rule of thumb is that if I can get it from the provider if I ever need a copy, I don’t keep it. Utility bills, for example, are readily available from the utility company if you ever need a copy so once they’re paid, it’s in the trash.

After you have developed a system that you like, you may consider this…

An acquaintance of mine has completely gone to scanning every document and throwing away all of the paper. She uses the same filiing system that she used with paper files. She keeps a backup of her hard drive at her office so if the house burns down, she has everything she needs. She ended up shredding like 15 boxes of paperwork and has never looked back.

13

If you’re starting out fresh anyway, go paperless at every opportunity. Even my tax file is in PDF form after I filed. The key with paperless, and if you’re holding electronic documents, you will need to take backups for the important stuff. CD Writer? External Harddrive? Done. Easy. Simple as pie.

Plus if you have a cellphone with a camera, it is so cool to be able to just snap a picture of some information that I need later, or need to keep.

Paper… lol, please. Filing cabinet? What?*

*Understandable for those who started with one, but if starting today, what a waste of space, time, and paper.

14

Just for comparison, here’s what we do:

2 drawer file. The front of the top drawer has a hanging file for each utility/regular bill. I drop the paperwork into the front of each file as I pay them.

Come Feb-Mar, I pull out the previous year’s worth of the bills and create a summary. Basically, I add up (for example) how much, total, we paid for electricity and how many KWH that was for. Ditto for gas and “therms”, water/sewer bills and, uh, whatever the unit for that is. Property taxes. Insurance bills. Pretty much everything that relates to owning/maintaing the house.

Then I put this all on a single page and print it out (“Yearly Expenses 2008”) and toss all the bill paperwork.

I have these sheets going back for about 15 years now, and find them helpful. If your electricity costs have jumped the past year, was it because you were using a lot more electricty (if so, why?) or is it just costing more per unit (and maybe it’s time to look into those solar panels.) Things like that.

Also in the top drawer are bank and investment statements. I stuff each years worth of them into a manila envelope and put them into ‘dead’ storage in the garage. Where they moulder away…

The back of the top drawer is for ‘legal’ type stuff: copies of wills, copies of birth and marriage certificates, all that stuff. (Originals live elswhere – law office and bank safe deposit box, mainly.)

The back of the bottom drawer has ‘object’ folders. Mostly appliances, but other ‘sizeable’ purchases. Each is labeled with the object’s name and when we bought it. “Dishwasher - 2004” The manual for the object goes in there, plus the receipt/warranty info, any other paper work. In truth, we almost never use this stuff, but it makes it easy to pull out and dispose of all the paper when the object itself dies.

The rest of the bottom drawer is for ‘stuff of interest.’ Hobbies, places we might want to visit, interesting articles, whatever. Just stick each subject into a folder and put them in alphabetically. Every now and then I flip through the folders and dump the ones we no longer care about.

Yeah, a lot of this could be kept electronically, but a single filing cabinet doesn’t take up that much space.

15

You know about spreadsheets, right? And Quicken, etc?
Here’s the one I have, budget, but never use. :wink:
I should, though. I’ve had it for years.

16

Think carefully about what you actually need to save, paper-wise. We toss utility bills, for example; when we were first married, Typo Knig was saving them, then I pointed out that really, why do we need them? We’ve got the cancelled checks if we need proof of something.

What works for us tax-wise is that all year long, we’ve got an envelope on the desk into which we put receipts that are tax-related (donations etc.) then at the end of the year, move that to a larger envelope into which we shove all the 1099s etc.

We mostly toss all things like medical insurance EOBs - we’ve only once been able to itemize, and that year we had proof of all monies paid by going through our Quicken files. We could reprint anything we needed.

Speaking of Quicken (or MS Money or whatever). Get it. Use it. Diligently. At the end of the year, you’ve got all your expenses RIGHT THERE. That’ll include things like donations (reminders to dig up the receipts or whatever), medical expenses, interest income, dividends… when we do our taxes, basically we just load everything directly from Quicken to Turbo Tax, and go through the 1099s and receipts to double-check the figures. Need to know how your electricity bill compares with last year’s? 10 seconds to find out.

Bank statements: We’ve been filing them in a filing box designed for letter-size envelopes. Usually by year / month. However we recently switched to paperless. Now we download the PDF to a specific directory on the hard drive. We’re doing this with most of our other financials / bills also. Bye-bye tons of paper.

17

Thank you all for your suggestions to my OP. I’m naturally a packrat, but can be trained to throw things out - it’s good to hear how much people don’t keep.

Then one little thing comes along and re-awakens my paranoia to save everything: My town offers a a $1000+ annual property tax exemption - provided I show 6 hard-copy pieces of proof that this was my primary residence at the beginning of the previous year. So I needed my original paper copy of my Jan 2008 electric bill, phone bill, bank statements etc. showing my street address. Criminy. I tried to explain to them that this kind of paper proof is going to be harder & harder to come by with all the e-billing. If I could have read the town hall clerk’s thoughts, they might have been “you don’t understand. this is massachusetts…”

For those who toss out receipts, aren’t you concerned about having proof of deductions in case of IRS audit?

18

ok. major confession time.
(gulp)

I’m actually an “authority” on financial software. My part time gig is doing tech support for financial software like Quicken. I work for the guys who make iBank.

(It’s a mac-friendly competitor to Quicken. happy to answer any questions about it for mac users who are looking for an alternative. It’s got plusses & minuses.)

Yes, I’m like a catholic priest advising people on marital relations. I spend part of each day telling others how to set up their accounts, when my own are a mess. And actually, since I started the gig, I’ve made major progess getting my online stuff together, it’s the paper part that I had questions about, prompting my OP.

19

I can download and print my utility (PG&E) bills for at least the past year. That’s true for just about anything.
iBank, huh?

20

I take the default deduction at tax time. I am a boring one job, no investments, no house, 1040EZ kind of guy. If/when my taxes get more complicated, and I need to keep receipts then I will just start my tax envolope earlier. Of course then I will have to keep track of the envolope for longer than the 2 or 3 weeks every year I do now.

As to the utility bills I was able to print back statements from the web. Now my utilities are covered in my rent so I don’t have to worry about those any more. This will actually make it easier for people to get the rebate your town offers. If they can’t find the bills they just print new ones.

-Otanx