Weekly Quick Tips

Organizing Financial Records

Whether it’s a young newly married couple, a senior who’s downsizing, or a business professional, it seems as though we’re all drowning in paper. And what’s worse? No one seems to know what to keep and for how long.  The following guide can be used to help you determine what papers you should save and which ones you can discard.

Paycheque stubs/direct deposit stubs ~ after checking for accuracy, save only the most recent stub, which may be requested as proof of income or employment

  • Bank Deposit slips, ATM slips, debit/direct payment receipts ~ save them to verify amounts on your next bank statement and then toss
  • Bank statements, cancelled cheques ~ save bank statements for three full tax years; you may need them for a tax audit or to prove that you paid a bill if you don’t have the receipt, save cancelled cheques for one full year
  • Receipts ~ save the receipts to verify the amounts on yourcredit card statement, save merchandise receipts for 30-90 days as proof of purchase should you choose to return the item for a refund or exchange, staple receipts to warranty certificate or product/instruction guide, save automobile repair receipts as proof of payment in the event of a recall, save receipts for furniture and other high-ticket items along with photos of those items and a household inventory list in a safe deposit box or fireproof filing cabinet to document replacement value, toss receipts for items you no longer own.
  • Tax deductible receipts ~ after verifying against your credit card statement, record in your bookkeeping system and then file with other tax records, which you should save for up to three full tax years (after three years you can still be audited, but the government cannot ask for supporting documents)·
  •  CreditCard Statements ~ check to ensure that your last payment was received and verify any new changes, then toss last month’s statement and keep only the most recent one. (keep all statements for credit cards that are solely used for deductible expenses)
  • Utility Bills ~ when the next bill arrives, check to make sure your account was credited for the proper amount and then toss the old bill
  • Insurance Policies and Bills ~ save insurance policies (life, home, automobile) for the period in which they are in effect, toss cancelled insurance policies and related statements, and save each monthly bill until the next one arrives to check that your account is properly credited.
  • Tax returns ~ as recommended by accountants, keep your tax returns for 7 years, storing them in a large manila envelope labelled ‘TAX RETURN 20XX’, filed with previous years’ returns in a bankers box
  • Investment records ~ if investment summaries are cumulative, keep only the most current one, keep savings certificates, stocks, bonds, and other securities in a safe deposit box or fireproof file cabinet.

Our official disclaimer is this: don’t take our word for it. When in doubt, check with your own accountant or financial advisor to verify that this information is accurate for your location and your situation.

The home office has become a standard area of most of our homes. While we’d all like it to be a model of efficiency, for many it seems to be a special kind of magnet that attracts every conceivable piece of paper that comes into our homes. Office clutter is almost always a paper problem, and what’s amazing is that if you think about the paper that fills your office ~ the books, magazines and mail ~ you’ll realize that most of it is stuff you’ll never use or access again! The road to good organization is paved with discarded filing systems. File cabinets can be sneaky, masquerading as organizational systems, and while they are better than random stacks of disorderly papers, they don’t automatically solve the problem. Part of the problem is that a file cabinet can hold so much paper that the temptation is to fill it, and file everything. This is a mistake! Remember that 80% of what we file will never see the light of day. Be judicious about what you file. Cull your papers once a year to get rid of outdated and unwanted items.

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