Each year, Americans spend an average of 2.5 days searching for things they’ve lost.
Spending time looking for the television remote or your favorite pair of sunglasses isn’t detrimental. But sadly people often lose important documents that may contain personal information.
Losing one of these important documents can lead to financial or legal troubles, so make sure you always have them easily accessible!
1. Tax Paperwork
Each year when tax season comes around do you spend hours trying to find the previous year’s paperwork?
Losing track of your previous W2’s or tax preparation log-in information can put your tax return on hold. And even worse, if you lose the paperwork and a tax audit is conducted, you could face serious fines.
Instead, when you file your taxes each year, combine all your documents into a folder designated for only tax information.
2. Pay Stubs
Your pay stubs are very important financial documents. Most lenders request copies of your pay stubs before issuing loans or mortgages. Having these already set aside can quicken the approval process and provide peace of mind.
We suggest keeping at least one year’s worth of pay stubs. After a year, your paystub information will be captured within your tax paperwork. Be sure to shred your old pay stubs to protect your personal and financial information.
If you’re a freelancer and don’t receive traditional pay stubs, use a website like thepaystubs.com to generate your own.
3. Personal Documents
When you’re thinking of all your important papers, personal documents may come to mind. There are many different personal documents that can lead to disastrous situations if lost. Instead, keep all your important personal documents in one spot.
- Birth certificate
- Social security card
- Last will and testament
- Marriage license
Because these are important, we also suggest letting your partner or power of attorney where you keep these documents. If you have multiple family members within your household, keep their personal documents in the same or similar folder.
4. Purchase Documents, Warranties
When you start acquiring valuable items, keeping track of your purchase documents is as important as the item itself. You never know when you’ll need to prove ownership for a variety of reasons.
Some examples of purchase documents include home deeds, vehicle titles, and large receipts.
When it comes to your large purchases, such as appliances, we also suggest keeping a copy of your warranty information. Many times, businesses will ask for proof of sale and your warranty documents to issue a refund or fix your item.
Organize Your Important Documents
Once you’ve gathered all your important documents, you need to organize them in a way that fits your life.
First, we suggest scanning the documents and making digital copies of them. Create a specific folder on your computer to keep the digital copy safe and handy for when you need it. Then, store the original document in a fire-proof filing cabinet.
Check out the Financial Guides section of this site for more great advice to get your financial life on track.