I just organized my files, and here’s what I did

I don't like clutter at all, but it's oh so easy for stuff to build up and get out of control — especially when it comes to paper. If you really like everything to be neat and tidy — but you don't want to spend your life managing the mess — read on.

The Problem With Paper

I dream about going paperless. But the fact is that there are still occasions when I need actual documents to prove my existence, prove what I've earned, or prove that I spent my hard-earned cash on whatever.

The problem with paper records is that they come in one at a time, from different sources. That means that they could end up in my car, my wallet, my jacket pocket, or my desk at home. Making sure they all end up in a central location that keeps them safe and still accessible whenever I need them is a bit of a chore.

Decide on a System

What works for me is a system of three sets of folders: monthly, topical, and important documents.

I have three areas for my records too: a small filing cabinet for the files I use regularly, small plastic filing boxes that I usually keep in storage, and a fireproof safe that I can grab in the event of an emergency.

Monthly Folders for Receipts

The heart of my filing system is the monthly folder. I have one folder for each month, and it's super simple. Here's what I throw in there:

  1. Anything related to income — paycheck stubs, bonus statements, refunds, reimbursable expenses, checks deposited by phone
  2. Anything related to expenses — receipts for groceries, incidentals, gifts, purchases
  3. Anything I just want to associate with that month

Whenever I have downtime or just want to get rid of the clutter on my desk, I spend a few seconds to grab whatever receipts or documents I've collected, sort them by month, and put them in the corresponding folder. That's it.

Topical Folders for Easy Reference

There are some documents I don't want to keep in the monthly folders, though. For example, I like to keep all the maintenance records for our car in a single folder so I don't have to search through all the monthly folders just to find a particular receipt. I set up topical folders to keep certain records together so that I can refer back to them easily.

I devote sections in the filing cabinet just for topical records folders that relate to each other. Even though they're in separate folders, I keep the car purchase documents, the loan statements, and the maintenance records together in a particular section.

You may want to devote a section to your medical insurance records, investment statements, school records, your children's sports activities — anything you want to keep together in one place because you may need to refer to it this year, next year, or even a few years down the road.

Here are a few special topical folders that I keep in addition:

Bills to be Paid

Some bills that come in the mail may not be due for a few weeks or months, so I have a special folder just to keep any bills I have yet to pay together in one place and off my desk. Some examples are the car registration, a license renewal, a dentist bill, or the gardener's monthly statement.

Tax Records

I make a separate file folder to keep anything that is important for that year's tax return. Then when we prepare our taxes, the actual returns are also put in the hanging folder in front of that year's monthly receipts files.

Wallet Contents

I made copies of everything in our wallets and keep the folders in the topical folders section. That way, if one of our wallets (or anything in them) is lost or stolen, I have the correct contact information within reach. Here's what I keep a copy of:

  • Driver's license
  • Debit cards/credit cards
  • Medical insurance cards
  • Hotel loyalty cards
  • Grocery reward cards
  • U.S. passport

Yearly File Storage

Every year, I move the monthly folders and tax folders into a plastic filing box and put them in storage. I used to keep them in a larger plastic bin, and I could keep something like five years of records in one box. But it didn't really work well for me because the larger bin was too big, heavy, and unwieldy. Yes, they were out of the way in storage; but if I needed some of the records, I had to get all the records.

In the end, I decided that smaller plastic boxes would be easier. I wanted to keep all the records for the year in one little plastic box so I could just grab the year I was interested in and leave the rest in storage. But I couldn't find exactly what I wanted, so I opted for a larger size and now keep two years' worth of records in each box.

The larger size is still a little too big, so I decided to keep other things with the records — like Christmas cards that have family photos and other mementos of things that happened during the year. You can take organization even further by creating a list of each box's contents if you want to, but I haven't spent the time to do that because the contents are fairly consistent year to year. But I still think it would be nice to have each year's records in its own box.

Grab-and-Go Files

This is the most important part of the system. I keep our most important documents (the ones that I need access to from time to time) in a fireproof safe. It's heavy, but it can be carried.

It contains more than documents at the moment, but the important documents are things like our certificate of marriage, Terry's DD Form 214 from the Navy, and other files we think are important or difficult to replace. We keep it near an exit so we don't have to go far to get it in an emergency.

You may want to keep important documents in a safe deposit box if you don't need access to them very often.

Decide When to Let Go

A good filing system includes a plan for when to dispose of records too. I haven't done this yet, but I want to start giving each file an expiration date so I know when it's okay to discard or destroy the documents.

When you're adding to a topical file, for instance, think about whether you need to keep every …. single … document in the first place. Do you need to keep all of the declarations pages for your auto insurance since the inception of the policy or is it enough to keep the most recent page? Maybe you decide to keep a year's worth or the last five years or whatever.

What You Need to Keep — A Simple Checklist

Everyone is different, so it's not easy to come up with a hard-and-fast list of all the documents you should maintain. But generally, you should keep documents that help you prove your income and how you spent it, documents that help you manage your finances, documents of legal significance, medical records, and things that are important to you or of interest to you. [In case you scan your documents and receipts, here's the IRS Revenue Procedure 97-22 (PDF). The rules about electronic receipts start at page 9.]

Here's a simple checklist to get you started:

Basic Documents to Keep


Legal Records

  • Birth certificate
  • Social security cards
  • Passports
  • Property deeds
  • Car titles
  • Wills

Financial Records

  • Loan records
  • Lease records
  • Banking records
  • Credit card statements
  • Investment records
  • Tax returns
  • Income and expense records

Insurance Records

  • Medical records
  • Auto, life, and home insurance policies

Miscellaneous Records

  • Major purchase/repair documents
  • Warranties
  • Owner's manuals
  • Education records
  • Employment records

The Tools I Used

Most of my records are 8 ½ x 11 or smaller, so all of the manila folders and hanging folders I use are letter-size. And I love labels, so I use full-cut manila file folders that let me slap as many labels as I want across the top of the folder.

And I love it when my labels are printed and look professional. I still use the Dymo Twin Turbo label maker I bought years ago when I had my own company. It's certainly not a necessity, but it makes me happy. I also have a bunch of Smead color-coded alphabetic labels left over, so I use them too. Again, not a necessity, but I really appreciate the year stickers. That tells me at a glance which year's receipts are in a particular folder and/or how many years I've had a particular account (because I keep adding each year's label to topical folders).

The color-coded labels tend to lose their adhesion and come off, so I put a Smead clear label protector on the folder as well. It keeps the labels from lifting off the folder and it keeps them clean as well.

I use Pendaflex hanging folders in different colors as a cue so I can easily see where the different topical sections in the filing cabinet begin and end. I like how the plastic section labels can be moved so they're all on the right side, the left side, the middle, or anywhere in between. Again back to the labels, I use the P-Touch label maker by Brother to make the tabs stand out.

What Doesn't Work

You'll know if the system you set up doesn't work for you — because you won't use it! Start with the end in mind. Think about why you need these records and how you use them. Then think about your schedule — how your day goes, how your week goes, and what you do seasonally — to help you find convenient times to keep your filing system up to date.

Files With Metal Fasteners

I don't use metal file fasteners anymore. I used to love having everything in a folder be all neat and orderly, but I don't have time to punch holes in the documents and fasten them in chronological order anymore. I just throw them into the monthly file and I'm done with it. If I have to find something, it's not hard to sift through a month's worth of receipts to find what I need. After all, there are only 12 folders to go through, and I usually know which month I'm interested in anyway.

Paper Clips

If I decide to keep multiple years in one file, I like to separate them with binder clips instead of paper clips. Paper clips tend to catch on other pieces of paper in the folder making it easy to lose a document in the wrong group. If the group of documents gets too big, I separate them into smaller sections — like maybe separate months.

An Inbox

An inbox doesn't work for me. It's easy for things to get buried in a pile documents. In my way of thinking, an inbox that sits on the desk is where documents go to die. However, I don't mind a vertical file holder sitting on a desk. At least that way, the folders are visible.

What I Need To Do Next

Buy a shredder. I need to get rid of old documents, but I don't want to just load up the trash bin with our personal information.

Organize my computer files. I'm hoping to get a new computer soon, and I want to set it up so my important computer records are secure too. My next task should be to get rid of the old documents on my existing computer before I transfer files to a new computer.

Paper records can be a nightmare to manage, but over the years I've developed a system that makes it a lot easier to maintain during the year. I usually make time in September/October to get the next year's files in order so that I can enjoy the holiday season and still be fairly organized when tax season rolls around.

Do you have a system in place or will you start one this year? How do you organize and protect your records? What tools do you use?

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Beth
Beth
4 years ago

Fantastic post – and very timely for me because I’m going through this process as well and there are some things on this list I haven’t thought of like the “contents of wallet” file. I highly recommend a cross cut paper shredder — think smaller pieces instead of long strips. I shred anything that has my address on it, including junk mail (especially those hated credit card offers!) For digital, the best tip I’ve heard is to keep an off site back up of your files. (If, God forbid, something happens to your home, having everything backed up to a… Read more »

Cookster
Cookster
4 years ago

Thank you for the monthly file folder suggestion. I will try this!
Do you recommend keeping your car title in the files or in a bank box?

Linda Vergon
Linda Vergon
4 years ago
Reply to  Cookster

Hi Cookster,

It depends on when you need the title. I would keep a car title in a safe deposit box unless and until I needed it to sell the vehicle or prove ownership. If you need access to it, I’d suggest keeping it in a lockable fire safe or lockable filing cabinet or drawer.

Thanks for commenting!

Linda Vergon
Editor of GetRichSlowly.org

My Factoring Network
My Factoring Network
4 years ago

Awesome post!!! The monthly ordering of all the financial documents can very manage all our financial hassles created. this easy process of documentation can save our confidential documents and keep them arranged all time. Thanks for sharing these ideas.

Vincent
Vincent
4 years ago

Enjoyed this post. I would be interested in the details of your fireproof safe and any recommendations you have. I just have my important documents in a file cabinet now and have thought about moving them some place more secure.

Linda Vergon
Linda Vergon
4 years ago
Reply to  Vincent

Hi Vincent, Our fire safe is manufactured by Sentry. I think it’s the Sentry Safe 1170 model. It’s roughly 13x15x12, and the inside is designed to allow the Pendaflex hanging folders to hang like they do in your regular filing cabinet. It costs in the neighborhood of $90+, so figure about $100 with sales tax. We used to keep our important documents in a regular, plastic filing box and kept it near an exit. The thought was if you grab anything in an emergency, at least grab that and go. But that doesn’t protect against fire if you’re not there,… Read more »

Zanne
Zanne
4 years ago

I actually use an in box, but it doesn’t sit on my desk. I have a shelf in my bookcase where it lives. I throw all paper which needs processing into that box, and at the end of each month, spend about 20 minutes to scan each document with my scanner. I have keystroke commands set up to relabel each document and move it to the appropriate file on my computer. (Fujitsu scanner, iMac, typeit4me, and hazel). That part takes another 20 minutes. I backup the computer files automatically to 2 separate hard drives and once a month to a… Read more »

Shaun
Shaun
4 years ago

While I applaud the filing system, I can’t help but wonder why you don’t go paperless. Yes, I agree you do need paper documents sometimes, but if you scan the original into your computer, when you need a paper version, printing it out is the same as a photocopy. Obviously, some documents – birth certificates, car titles, etc – have to be originals, but most everything else can be scanned. Bonus benefit: if you get your bills delivered electronically, they will most likely by in PDF form. Windows machines can index the text inside PDF files, so you can now… Read more »

Doan Duong
Doan Duong
4 years ago

Wow, excellent organizing system. Mine is not quite that complicated and I am currently struggling with how to streamline these documents/record keeping, since it’s becoming a mess. But one tip I got is that I kept a bin where I toss all the paper I want to shred, once it build up enough I take it to a local shredding place (they charge $5 or whatever) to shred it. I had shredders in the past but they have a tendency to break down after a year or two of use!

GregA
GregA
4 years ago

I use the Paperless application with a ScanSnap scanner to scan and organize as much as I can, stored locally on my Laptop. Use a USB 3.0 external 3 gab hard drive for time machine backup, then subscribe to Crashplan for offsite backup ($13/month for up to 10 computers).

Richard
Richard
4 years ago

It is sad to see someone organizing paper files in this day and age. I went paperless four years ago when I loved into a Winnebago motor home full time. There’s no room for boxes of paper! I solved almost all problems by purchasing an rather expensive Evernote scanner that quickly scans both sides of every piece of paper sent through it. It accepts stacks of paper up to 50 sheets at a time. Press a button and 50 sheets of paper (100 sides) get scanned and placed both in any hard drive folder you specify plus in Evernote (which… Read more »

Tidyfreak
Tidyfreak
4 years ago

This is one way to ensure that I’d never file anything. Get a scanner. When mail / documents come in read them and if necessary act on them. Place letter in scanner tray. Once a week scan everything as a PDF. your scanner will typically choose a default location for your files. You can leave them there until you are ready to file if you are super lazy/busy/demotivated Name the files in a structured format like: YYYYMMDD – Name of Sender – Type of document – Subject.pdf 20151001 – Dentist – Receipt – 6 Month Checkup.pdf When filing put all… Read more »

JL
JL
4 years ago

I guess the advocates of paperlessness are young enough that they haven’t had a bunch of stuff become unreadable because the format is no longer supported. I do go through my receipts when the credit card bill comes, make sure they match, move any money around from my special savings accounts that’s necessary, and then shred them, unless they’re for car repairs or things expensive enough that I might actually make a warranty claim.

Richard
Richard
4 years ago

—> they haven’t had a bunch of stuff … I am the person who posted the comment about going paperless. Thank you for calling me “young.” However, I should mention that I celebrated my 70th birthday last month and I have been storing things digitally for years. —> that they haven’t had a bunch of stuff become unreadable because the format is no longer supported. That is a trivial problem and is easily solved. I have been in the computer business since 1966, starting with 80-column punch cards and large reels of magnetic tape. Much of that information in the… Read more »

Ed
Ed
4 years ago

I do similar filing of non-receipts and major receipts as tidyfreak above and it’s worked well over the last few years. I scan most non-major (groceries, general household items, etc.) receipts into Quicken, which I realize is a proprietary format, but I’ve used Quicken for many, many years to help me keep tabs on finances, and expect to continue using it. If the day comes where I no longer use Quicken, it allows exporting to PDFs, JPG, etc. When I keep on top of it, not keeping paper around feels good to me. I also look for PDFs or just… Read more »

cbkcc1
cbkcc1
4 years ago

the following 2 links are very helpful for going paperless and organizing:

http://www.jamierubin.net/going-paperless/

http://macsparky.com/paperless/ (geared more towards Mac users but extremely helpful nonetheless)

Evernote and a ScanSnap scanner (expensive but a worthwhile investment in my opinion) can change the way you live.

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