Contributing to this pile of paper are paycheck statements, statements from bank accounts, credit cards, mortgage and auto loan accounts, retirement plan accounts, mutual funds, investment accounts, dividend and interest statements and confirmations for investment transactions.
And if you bought a home or refinanced a mortgage, that alone can generate a pile of paper at least an inch thick!
Here's a scary factoid: a family where both work, owns their home, has two kids, etc. will generate over one thousand financial statements and receipts each year.
Unless you do some judicious file cleaning, you'll need to add an addition on to your home to store this mound of paper.
Here is my guide for what to toss, what to keep and how to get it organized:
What to Toss
You can throw out most receipts immediately but some you need to keep briefly and some indefinitely.
Throw out ATM receipts for cash withdrawals once you've written the transaction in your checkbook. Keep bank deposit slips until the deposit appears on your bank statement.
When you discard financial statements, be careful to keep your personal information out of the grasp of dumpster-diving identity thieves. Use a cross-cut shredder to destroy receipts that include your account or ATM/credit/debit card number. You can shred and discard your monthly credit card statements after you've checked the bill to ensure there are no incorrect charges or fees that need to be disputed.
Shred and discard utility, phone and cable bills after you've checked for accuracy and paid them. If you use a money management program such as Intuit's Quicken, you'll have the ability to run detailed reports of these expenses if you ever need them. For example: if you sell your home, a prospective buyer may want to know your average utility bill.
Check back in a few days and I'll share a few thoughts on when you can throw away your tax records and when to hold on to them.