Step 4: The No Sweat Filing System


paper_zen This week, let’s work together on 5 small steps that will enable you to worry less and feel more in control—so that it takes less effort to manage your finances this fall.

Most people don’t know which financial documents to keep and which to toss—so they save it all, says professional organizer Lisa Zaslow, author of “Can I Just Shred It All?“.

Solution: A fast, flexible filing system based on keeping ONLY the documents you need, in big folders (which you can subdivide on an as-needed basis). For now, focus on broad categories—”and set up your 2011 files, while you’re at it,” suggests Zaslow.

Supplies: Two flat-bottomed, expandable hanging folders; manila file folders; labels; about one hour—and a good friend. “People get more done with a buddy,” she says. Put on a scary movie, pour some wine, then…

What to Keep
Stash the following papers in individual folders, labeled as follows:

Personal tax items
Business-related tax items
Bank statements
Credit card statements
Retirement account statements
Investment account records
Insurance policies: life, health, home, car, etc.
Home: mortgage and property tax docs; repair records
Medical: bills, claims, FSA records, prescriptions
0Car: title, AAA membership, repair records
1Kid stuff: tuition receipts, permission slips, calendars

What to Shred
It’s OK to ditch the following, unless you need them for business tax purposes or to track your own expenses.

2Paystubs (Unless you plan to reconcile them with your W-2, there’s no need to keep them, Zaslow says.)
3Utility, heat, cable, phone bills
4Personal credit and charge card receipts
5Rent bills
6ATM, grocery, gas receipts

7Set a date to declutter. What do you dread most?