By Charlestien Harris
March, known for wearing green in celebration of St. Patrick’s Day, also embodies the concept of “going green” in various aspects. In line with this theme, let’s discuss ways to enhance personal finances through thoughtful steps.
Spring serves as an opportune time to address financial organization, especially since many individuals have recently completed their taxes, revealing the disarray in their financial records. Common questions arise, such as how long to retain tax returns and other crucial documents. While retaining records indefinitely might seem convenient, it poses a risk of falling into the wrong hands, like identity thieves.
Here’s a concise guide to help you declutter your financial records with specific timelines:
Keep as long as active: This category encompasses agreements and contracts active for varying durations. Retain these records as long as you own the related asset.
- Warranty information
- Insurance documents
- Vehicle titles and loan documents
- House and mortgage documents
- Pension records/retirement plans
Keep for at least one year: This category involves mostly monthly statements. Retain statements for the current year and shred them once reconciled with an annual statement.
- Bank statements
- Pay stubs
- Quarterly investment statements
- Canceled checks
Keep for at least seven years: Documents falling into this category include:
- Income tax returns
- Forms supporting income or deductions (e.g., receipts, canceled checks, W-2 forms)
- Records of selling a house or stock (capital gains tax documentation)
- Records of paid-out loans
- Records of sold investments
- Medical records (bills, prescriptions, health insurance information)
Keep forever: The essential, irreplaceable documents should be kept securely to safeguard them. Options include a locking file cabinet, a fireproof safe, or a safe-deposit box at a credit union or bank. Consider scanning and securely backing up these documents on the cloud for remote accessibility in emergencies.
- Birth and death certificates
- Social Security cards and ID cards (even expired versions)
- Passports (even expired versions)
- Marriage licenses and divorce decrees
- Copies of wills, trusts, and powers of attorney
- Adoption papers
- List of safe-deposit box inventory
- Records of paid mortgages
- Mortgage documents
- Wills, living wills, and other court-filed documents
- Legal filings and inheritances
- Marriage licenses
- Military discharge documents
- Life insurance policies
Going green in your financial practices can be as straightforward as knowing how long to retain specific documents. By responsibly discarding unnecessary financial papers through events like annual “shred it” days, you can reduce clutter. Check with your local Chamber of Commerce or civic organizations, which often sponsor shredding events.
For additional information on this and other financial topics, visit our blog at banksouthern.com/blog, email me at Charlestien.Harris@banksouthern.com, or call me at 662-624-5776.
Until next week – stay financially fit!