In a previous post, I cautioned that it may not be worth the time to maintain a highly detailed filing system. I promised I would follow up with my recommendations for a simple paper management system, and guess what? I am having a very hard time making it simple! Paper is complicated stuff.
So here’s the best I can offer. At the simplest level, I recommend sorting all papers into three basic categories:
- Active/Pending: Papers that still need action or follow-up
- Important/No further action required: Papers that you keep because you “have” to
- Sentimental/Memorabilia/Informational: Papers that you keep because you “want” to
Basic foundation
These three categories form a very basic foundation. It’s far from perfect, but it’s a good starting point. Once you have papers sorted into these categories, you can make further refinements, if you like.
Active/Pending
Examples:
- Bills to pay
- Forms to fill out
- Tickets to an event
- Projects in progress
- Papers related to an insurance claim that’s still being processed
- Lab slips for upcoming medical tests
- Voter information materials and absentee ballot
- Receipts for things you might return
- Tax-related documents for unfiled tax years
Keep Active/Pending papers in an easily accessible, visible location, like on your desktop.
Once the action has happened or you no longer need the paper, you can either toss it or file with other papers that you are keeping.
Important/No further action required
These are papers that you need to keep anywhere from 1 year to forever, but no longer require action on your part, unless there is a change. This will be a large volume of papers, so it may help to break them down into two groups: 1) single/issue permanent and 2) recurring/shorter term.
1. Single issue/permanent: These are papers that are only issued once and are updated infrequently, if ever.
Examples:
- Birth certificates and other family documents
- Passports
- Medical records
- Legal documents and decrees
- Contracts you have signed that are still in effect
- Important school or employment records
- Papers related to home ownership and/or any properties you own
- Rental agreement, if you are a tenant
- Title and maintenance records for any vehicles you own
- Receipts and warranty information for major purchases
- Insurance policies
- Tax returns
Keep these papers together in a safe location, and if possible, keep them separate from the recurring papers described below. The rationale is that you will need to keep these papers indefinitely, (if not forever), whereas the recurring papers can usually be tossed after a few years. Also, these are the most important papers, and if they are kept separate from the others, it will be easier to grab them in a hurry if you are forced to evacuate your home.
2. Recurring/shorter term: Usually, these are things that are frequently updated or that will expire within a year.
Examples:
- Financial documents related to specific accounts
- Bank statements
- Utility bills
- Credit card statements
- Other paid bills
- Pay stubs
- Receipts for non-major purchases
You’ll probably be adding to these papers fairly often, so keep them in a container that you can access easily. The simplest way is to keep them in one box, and just drop the most recent papers on top. Clearly label your container with the applicable year(s). Some people like an accordion file with monthly dividers, and they file the paper according to the month the money was spent.
Follow IRS guidelines or whichever legal and financial experts you trust to determine how long to keep these papers.
Sentimental/Memorabilia/Informational
These are papers you will want to keep indefinitely because they bring joy to your heart or they are relevant to your interests; however, there will be no negative legal or financial repercussions if you lose them. Unless they are handwritten notes, most of these items will not have your name or other personally sensitive information.
Examples:
- Personal notes and cards
- Programs and playbills
- Journals and diaries
- Memorable schoolwork
- Articles from print media or printed off the web
- Pamphlets/brochures
- Newspaper clippings
- Maps
Keep these in any safe location of your choosing, for as long as they are meaningful to you.
Going further
Once you have these foundational categories sorted, contained and labeled, live with the system for a while and see if it works well enough. If not, you can continue making incremental refinements until you reach a level of detail that works for you.