How To Create a Slick Filing System – Steps 3 and 4


Step 3: Sorting

Sort all the papers – on the floor, on a table, wherever works for you. If you already have them in folders, this will be easier, though you may wind up having to break down or purge the contents. But if you have a ton of loose paperwork, I recommend that you NOT try sorting all of it at once. Pull out and sort the simplest, most obvious categories first – Insurance (separate by type), Auto Records (separate purchase records from maintenance), Pet Records, etc. Set anything you aren’t sure where to file or that is complicated aside. Put Manuals in a separate area and ignore them for now.

Now here’s the first part of my slick system: Hold out all financial material from the CURRENT YEAR and put it in a separate stack. This is going to include:

  • Bank and credit card statements
  • Tax information (if you haven’t filed yet for the previous year, hold out both last year’s and the current year’s material, separately)
  • Utility bills (if you save them)
  • Unpaid property tax bills (if you own a house)

And the like. I also keep the current year’s medical and dental records and bills out.

Go ahead and sort prior years’ financial material by year (along with anything else you keep in annual folders), if they aren’t divided up already.

I no longer get paper bank statements, but I do print them out from the bank’s website each month to reconcile my checking accounts, and I save the printouts afterward. This is my preference and may well not be yours.

I choose to receive paper credit card statements via mail, simply because they are extra long and my printer doesn’t do legal-size paper. If I shrink the online statement down to fit on letter-size paper, the print is too small for me to read without difficulty, and I need printed copies to enter the transaction information into my financial software.

Next, put paper or binder clips on every individual category you’ve sorted, both current financials and all the other categories, and label each stack with its category (and year, if applicable) on a sticky note. Put the current years’ material in one pile and the rest in another pile.

Go back through the remaining papers (except manuals) and continue sorting by category.

Evaluate anything you have left over. You may find some of these are personal items you want to keep. I put these in the category “Memories.”

If you just can’t decide what to do with some of the material, leave it alone for now. As you work through the process, the answers may become self-evident.

Step 4: Longevity

How far back does your material go?

  1. You don’t need insurance policy records going back for more than a year. You need the original policy, any riders (such as for jewelry), the most recent bill that came with a policy booklet attached, and the most recent statement you paid (if different). Toss the rest.
  2. Bank statements and credit card statements: I keep the current year (separately) and the past three years’ statements in my office file storage, then archive them (Step 10). (Experts say you don’t have to save all these so long. It’s my choice to do so. See the link below.) I suggest sorting these in month order for each year before you start filing; if that’s too OCD for you, you still must separate them by year.
  3. Utility bills: I save the current and previous year’s bills (for comparison). The current bills are kept out; the previous year’s will be filed.
  4. Auto records: Separate these into purchase, maintenance and accident (if any) records. Maintenance should be kept for the life of the car – they may be very valuable when you trade in or sell the auto. I hold on to purchase records for awhile after I change cars. I can’t tell you how long I keep accident records because up until recently I never had a serious accident. I’ll probably hang onto these for some time.
  5. Health records like test results and surgery/major illness information should be kept forever, in my opinion. When you change doctors, the new one does not always get enough of your medical history, and if you have a file of blood test results going back a few years, you can get better care. Although this circumstance will probably improve as more and more records are kept electronically, it can’t hurt to have a backup – computer systems do crash, and sometimes they burn.
  6. I file the past three years’ worth of paid medical bills and then toss, but how long to keep these is up to you.I used to match each medical bill with the corresponding insurance Explanation of Benefits (EOB). This got to be a pain in the neck. Right now I’m tossing the EOBs upon receipt, but this really isn’t a good idea. You have to look at them in case there’s a discrepancy or a claim is denied when it should not have been. Keep the current year’s in with the other current material and file the previous year’s. You can pitch last year’s at the end of this year (or not – up to you).
  7. Pet records: for the life of the pet. Past medical records could save your pet’s life if you change vets.
  8. Property tax records: keep for as long as you own the house, and then for as long as you wish. (If you move to a new home in the same area, you may want the old bills for comparison.)
  9. Tax returns: I keep the last three years’ filed returns in my cabinet, then archive them (Steps 9 and 10).

(For a complete list of what to keep and for how long, see How Long to Keep Documents from Consumer Reports. As you can see above, I choose to keep more things and keep some things longer than experts recommend.)

Of course, you’re going to have categories I don’t. I have no spouse or children, and obviously those who do will have a great many more categories. On the other hand, I have Social Security, Pension and Medicare information, which younger people (unless disabled) will not. I don’t have college records. My “Memories” folders got crammed full when I was younger (and are entirely unorganized) – now they are slim and it takes years for them to fill up.
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