Which Financial Records to Keep (and How Long to Keep Them)
Thursday, 3rd August 2006 (by J.D. Roth) An AskMetafilter user wonders how long to keep receipts:
I have been keeping all of my receipts for some time now. Every day, I enter them into my money tracking system (presently just a text file where I capture date, payee and amount). Then I file the receipts away in folders by month. My question: does it do me any good to save the receipts, or is having the data good enough? [...] I’ve never had to bring out individual receipts for tax purposes before, but my understanding is that if I got audited, having all my receipts would be very helpful. Is that true?
Bankrate has an excellent table summarizing how long to keep financial records. To summarize:
- Keep any tax-related records for seven years.
- Keep records of IRA contributions permanently.
- Keep quarterly retirement/savings plan statements until you receive an annual statement. If the numbers match, shred the quarterlies and keep the annual summaries permanently.
- Shred unimportant bank records after one year; keep the rest permanently.
- Keep brokerage statements until you sell the securities.
- Most of the time you can shred bills once you get a cancelled check. Keep bills for big items permanently.
- Keep credit card receipts to reconcile with your statements, then keep the statements for seven years.
- Easy and must do habit -get a copy of your free credit report.
- Paycheck stubs should be kept until you receive your end-of-year tax statements.
- Keep house records permanently. (Some can be held for less time, but I think it’s wise to keep them all.)
Remember: If possible, shred all financial documents when you get rid of them. A program such as Quicken can help you track and manage your finances effectively without leaving a paper trail.
[Bankrate: What financial records to keep, how long to keep them]
That table is helpful, but it still didn’t answer the question of receipts. I get the bank records, etc., but what about receipts? I stash these things away every year and usually purge them after three years. If they can be shredded after one year, my wife would be grateful, I’m sure.
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Thanks, this is something I often wonder about. The one that really surprised me, though, was the suggestion to keep credit card statements for seven years. Is that related to taxes, I wonder, or is there some separate law that has a 7-year statute of limitations?
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Can I ask a question?
What is your preferred storage method for all this stuff? I mean, I was using 3-ring binders for a while, but I think I need something more robust. Should I just get filing cabinets, or cardboard boxes, or what? I need something to keep the last year handy, and previous years safely stored away.
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To be honest, my preferred storage method for nearly everything is a *shoebox*. I’m not joking. I’ve been using this method for fifteen years, and it suits me well. It’s true that I need the date for any record that I’m looking up, but if I have the date, I can dig back through and find the appropriate receipt/statement in the strata of paper. I keep the current shoebox tucked near my desk and stuff all receipts in there after I’m done with them.
This is a good question, though: what do other people do?
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I would recommend keeping records in a fire proof file box, out of the reach of water, if you live in an area that floods. So like, keeping stuff in a cardboard box in the basement, is not a good idea. It is worth it if you have a fire, flood, or buglary. It might seem silly, but if government and corporations protect their records, there is no reason why you shouldn’t.
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Oh and for what I do with my records? I keep them in a plastic file box, so obviously I don’t take my own advice. Most of it is non vital anyway. I don’t own anything large and I rent. Most of my bills are electronic and I shred the ones that aren’t once they’re paid.
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I’ve had an idea that has evaded proper execution ever since I chose it as a new year’s resolution.
I’m something of a packrat and for all my trouble locating tangible items, I do pretty well with keeping track of electronic information. I keep traditional file hierarchies for work documents and such, and I use databases for a lot of info that I keep.
So, why not take all my receipts/bills/invoices/etc , plop them into my scanner every weekend and keep the images of documents along with index-friendly associated info? I even put together a simple php+mysql app for this very purpose.
Unfortunately, I never got around to actually using it because I have the impression that my scanner is slow and cumbersome to use, even though it’s not and I can probably optimize things further with some photoshop actions.
If I get regular about performing the data entry, I can have all this info readily available and easily search for it. What’s not to like? I should mention here that I have a good backup system. I lost all my crucial data when I was 18 and decided not to let that happen any more.
I’m still wanting to do this someday, but I haven’t fully considered the implications of discarding the hardcopy. Should I still keep the most important items filed away somewhere or does it become irrelevant in the presence of such a system?
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HAahahahahaha.. I had the very same idea a few years ago, but damn if I’m going to scan in the past 7 years worth of bank statements.
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[...] Here’s why MyMoneyBlog uses Yodlee for watching his accounts. Did you know that Penny Foolish is a brunette? Get Rich Slowly has some suggestions about whch financial records to keep and how long to keep them. [...]
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How long to keep financial records…
Finance blog Get Rich Slowly discusses which financial records you should keep on hand and for how long. * Keep any tax-related records for seven years. * Keep quarterly retirement/savings plan statements until you receive an annual statement. If……
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How long to keep financial records…
Finance blog Get Rich Slowly discusses which financial records you should keep on hand and for how long. * Keep any tax-related records for seven years. * Keep quarterly retirement/savings plan statements until you receive an annual statement. If……
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I keep my items in manila envelopes with the little red string/two cardboard circles as a lock.
I write the purpose of the envelope on the outside top right corner, say daycare receipts, or bank statement, or visa bills, or 1999 tax return. Each envelope has just 1 type of item. Close it up, and file it in a bankers box.
When an envelope gets too fat, then it is time to open it and trim the old stuff (I always add to the back, so old stuff is up front).
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For keeping records I use the Noguchi filing system (http://communicationnation.blogspot.com/2005/12/noguchi-filing-system.html), storing envelopes in a Muji polyethylene box near my desk. Works pretty well.
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The Noguchi filing system link didn’t work, let’s try again: http://communicationnation.blogspot.com/2005/12/noguchi-filing-system.html
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S/100/30, the Bankrate article says keep credit card statements for seven years only if you have tax-relatd expenses on them. So if you pay for your car registration or a new roof for your home with your Amex, you’ve gotta keep that bad boy.
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[...] » Get Rich Slowly » Which Financial Records to Keep (and How Long to Keep Them)06/08/06 00:28 from del.icio.us/btyung [...]
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I’m curious about the validaty of the scanned images.
Is it alright to keep the electronic images and destroy the original document? I’ve checked some money sites and organizing sites. I felt that it is no problem to scan them and keep the electronic images but am not 100% sure.
Actually, I’ve started to scan financial documents couple months ago .I didn’t try to scan all of my old ones. I freshly started with newly generated documents back then.
I used iPhoto to manage the images. It’s pretty simple. I use iPhoto Buddy to separate my photos from my receipts, though. Now I’m thinking using simple file system because Spotlight is so powerful to search any financial data that I need.
As far as it is valid, it is much less work and headache for me.
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[...] Here is an article on which financial records to keep and how long to keep them. I should probably use these guidelines to replace my current “keep ‘em till you lose ‘em” approach. [...]
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One Lifehacker reader found a couple of good links at the IRS with the government guidelines for record-keeping for individuals and for businesses.
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[...] Most importantly, when you’re ready to part with financial records, do shred ‘em before tossing into the recycling bin. — Gina Trapani Which Financial Records to Keep (and How Long to Keep Them) [Get Rich Slowly] [...]
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I destroy all my bills right after I get it. If you are a typical one-income salaried employee, and show no deductions or claim earned income benefits, etc, its very very unlikely you’ll ever get audited.
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[...] Aug. 3rd: Which financial records to keep (and how long to keep them) [...]
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[...] The best defense against an audit is to be honest. Report all of your income. Don’t try to fudge things. Use tax preparation software or an accountant if you’re nervous about getting things right. But even if you have a professional prepare your return, check it for obvious errors. Be sure the numbers make sense. Save your receipts. [...]
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[...] discussed before which financial records to keep, and how long to keep them. With the increase in identity theft, it’s important to destroy your documents when you purge [...]
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[...] For a list of what documents you need to keep and throw away, click here. [...]
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[...] Save your receipts. Put them in a shoebox under your bed if you must, but hold onto them. You’ll need to be able to compare them with statements at the end of the month. And some you’ll need to keep for several years. [...]
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[...] Which Financial Records to Keep (and How Long to Keep Them) ? Get Rich Slowly (tags: finance) [...]
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[...] Know which financial records to keep (and how long to keep them). Purge your archives. For years, I’ve kept every financial document that comes into my life. I literally have dozens of shoeboxes in storage filled with financial documents, most of which I no longer need. By learning which documents you need to keep, you can be sure that you’re not storing useless paper. [...]
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[...] I now believe this system is flawed. I’d like to move toward paperless personal finance, and thus would like to purge all this old stuff, keeping only the items I still need. [...]
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so, I just got done shredding credit card statements from 2002 and lower….nothing I can do…also how long do you keep phone bills, (cell and land lines) once the check has cleared…………………Sandi
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[...] this question has been answered by numerous others before. The summary below is from Bankrate which fools especially will appreciate for its concise [...]
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I have a two-fold strategy for keeping receipts. First, I keep all receipts for purchases made by credit/debit card (which is basically everything for me) for at least the length of the store’s return policy. Nothing like going to return something after a month and a half and realizing you shredded the receipt after the credit card statement arrived. Some stores will still give you a break, but it’s always easier to have the receipt.
Then, for larger purchases such as appliances, electronics, etc., I file the receipts away for the length of the warrany. A lot of manufacturers want the receipt to prove your purchase date; otherwise they may base your warranty expiration on the manufacture date in their records based on your product’s serial #, which could be weeks or months before you actually purchased it.
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[...] may also be interested to know which financial records to keep and how long to keep [...]
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Keeping records in the UK is just as bad, especially if you are self employed, you must keep all your records then, and to be honest it’s a pain. Got myself some archive boxes and stored all the files in my attic. After 5 years I was required to show statements to the Tax office in regards to a tax form filled in 4 years ago. Thankfully everything was fine but had I not kept them then I would have been in trouble. So I think it’s always wise to all ways keep hold of the key documents.
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