Are you determined to get your home office under control? It doesn’t take long for financial records to get the best of us. One of the most important steps to organizing is determining what is worth keeping and what isn’t. Paystubs, credit card bills, mortgage statements, utility bills, and the endless stream of financial mail are enough to overwhelm anyone

There are several records that are important to save:

1. Save pay stubs for a year. If you receive your paycheck via direct deposit, you can get away without saving your paystubs. Though errors are infrequent, the ability to double-check your W-2 form against your paystubs can be useful. You can run them through the shredder a year after your taxes are completed.
2. Keep investment records for as long as your own the investment. Waiting 12 months after your taxes are filed is even more prudent. It’s beneficial to double-check your gains or losses when selling. Remember that these records are frequently available online, so paper copies are redundant.
3. Keep tax returns for a minimum of four years. For a standard audit, the IRS will go back 3-4 years. If you’ve underreported your income by 25% or more, they can go back even further.
   • If you’re an honest tax filer, four years is sufficient. If you’re not, keep at least 7 years of returns.
   • Do you have a nanny, housekeeper, gardener, or other domestic help that you hire directly? Keep 3-4 years of pay records.
4. Mortgage records are also worth saving. This includes all the documents received at closing and records of payments. Also, keep receipts related to home improvement projects

Fortunately, there aren’t many records that require saving. While there are financial records worth keeping, most paperwork can be fed to your shredder. 

Avoid keeping these records:

1. Put your bills in the shredder. Most bills aren’t worth saving. Only keep bills that are necessary for tax purposes. Check your bills for accuracy and then pay and shred them.
2. Throw out all junk mail except preapproved credit card applications. As annoying as junk mail can be, avoid the urge to throw all of it in the trash. Shred preapproved credit offerings to avoid identity theft issues.
3. Computer media can have sensitive information. Be aware of simply throwing away memory sticks, old computer disks, or hard drives. There are companies that will destroy these items for you. A hammer can serve well, too. Some experts recommend fire, but the fumes aren’t exactly safe. A hammer is more environmentally friendly.
4. Unless needed for tax purposes, avoid saving receipts. If you’re very conscientious and go over your finances in great detail each month, keep your receipts for a month. Otherwise, throw all receipts in the trash except those that are for items that you might want to return. Keep these receipts until the return period has expired.
   • As a general rule, the more expensive the item, the longer a receipt should be saved. It makes more sense to keep a receipt for a new washer and drier than a pack of gum.

It’s easy to determine which items should be shredded. Shred items that you wouldn’t want falling into the hands of strangers. If an item contains your social security number or credit card number, shred it. Beyond that, it’s up to you.

Financial records are a part of everyday life. From ATM receipts to mortgage statements, financial papers accumulate at a rapid rate. It’s important to know which financial records are worth keeping and which aren’t. Avoid keeping records that serve no purpose. Keep your financial records neat and organized.