Suze Orman Says to Keep These 6 Financial Documents for at Least One Year
- It's a good idea to declutter your files every so often.
- There are certain financial documents you shouldn't be so quick to shred.
- Pay stubs, bills, and brokerage account statements are among the documents to hang onto.
It pays to take her advice.
I'm the sort of person who hates clutter. And so I try to do what I can to eliminate it. That often means doing toy purges in my basement to clear out things my kids no longer play with, and sorting through my bookshelves so I can donate novels I'm done with and don't see myself reading again.
Another area I make a point to try to declutter regularly is my office. Since it's my workspace, being surrounded by stacks of documents tends to mess with my sanity.
But sometimes, it can be tough to know which documents to keep and which to get rid of. To that end, financial guru Suze Orman has some advice. Here's what she has to say.
The documents you should keep for at least a year
There are certain financial documents you may not need to hang onto for very long. If you take an ATM withdrawal, for example, you probably don't need a copy of that receipt.
On the other hand, Orman says these six items should be kept for a minimum of 12 months:
1. Pay stubs
You need these because they're a record of your earnings from work. And you'll want to check them against your annual W-2 tax form and Social Security earnings statement to make sure those documents are accurate.
2. Utility bills
It's a good idea to keep records of utility bills around in case you need them for tax purposes. If you're self-employed, for example, you may be able to deduct a portion of your utility costs on your tax return. Also, if you're enrolling children in your school district for the first time, you'll generally need a copy of a recent utility bill to prove that you live where you say you do.
3. Canceled checks
Orman thinks it's smart to keep copies of canceled checks around for at least a year. That way, if you have a discrepancy in your checking account statement, you'll have an easier way to resolve it.
4. Credit card statements
It's a good idea to keep copies of your credit card statements so you can refer back to them for budgeting purposes. You might also need those statements if you're taking certain deductions on your tax return.
5. Bank statements
You may need your bank statements to figure out tax deductions you want to claim. Keeping yours can also help you track your savings efforts.
6. Brokerage account statements
If you have a brokerage account, you'll generally get a quarterly statement summarizing your account balance and holdings. It's a good idea to keep these for a year, until you get your annual statement.
How to safely dispose of financial documents
While Orman says it's a good idea to keep the above documents around for a year, once you're done with them, you don't want to just toss them in the trash. All of the above documents are apt to contain sensitive personal information, and if that information gets into the wrong hands, you could end up falling victim to identity theft.
It's a good idea to invest in a shredder so you can dispose of your documents as needed. Of course, another option is to sign up for electronic versions of as many of the above documents as possible. That way, you're less likely to lose them, and it'll be easy to access them when you need to.
Just as importantly, getting your documents electronically could help you eliminate physical clutter. And if you're like me, that's something you might need for your personal wellbeing.
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