How Long Should You Keep Important Documents?

Receipts, rates and insurances why are we afraid to throw them away? You just never know when you might need them.

Referring back to old bills for discrepancies and comparisons is one reason to keep, but what about the paperwork that has been piling up since the 90’s?

We all know the documents you never want to part with: birth certificates, marriage licenses, wills and anything legal. And others that you may know are very important, but aren’t quite too sure what their shelf life should be, particularly tax-related documents.
So what do we need to keep and what do we need to toss?

Tax-related documents

General rule of thumb for anything tax is seven years, you just never know when the tax man might come knocking for an audit.

• Copies of tax returns
• Tax or any legal communication
• Non-deductible IR contributions
• End-of-year financial statements
• “Retirement plans
• Property investment either bought, inherited or received as a gift
• Tax write off related items
• NOA forms
• ABN invoices

Life and everyday documents

Life documents are just that, you keep for life. Get a tidy little organiser for these documents and put them somewhere safe.

It’s a good idea to make digital copies for an offsite back up and also share them with your loved ones in case of an emergency.

• Birth certificates
• Marriage licenses
• Divorce papers
• Death certificates
• Copies of will, power of attorney etc.
• Passports
• Retirement plans

Documents to keep as long as you own a certain item

For big purchases it is wise to keep all documents should you decide you want to sell your purchase on. Obviously, for cars, boats and all big purchases, you have to retain all receipts and documentation until you’re no longer in possession of that purchase.

• Deeds to house
• Car title, purchase papers or lease agreement
• Receipts and documentation for major purchases (highend electrical, homewares, cars, boats etc.)
• Investments
• Debt repayment records
• Loan documents

Documents to discard after seven years

Anything tax or bank-related, it’s best to keep for seven years. However, these days, everything is online, so this sort of filing should be easy as the institution will have it all on record for you.

• Bank records
• Credit card statements
• Monthly statements
• Tax stuff
• Superannuation

Documents to get rid off after one year

All things annual, you can get rid of every year. Check that it has been paid, then you can throw it out, unless you’re like me and like to compare last year’s bill with this year. Just remember to get rid of them via burning or shredding. You don’t want nasty crooks getting a hold of your sensitive everyday information.

• Insurances
• Rates
• Water
• Electricity
• Financial payments
• Medical bills
• Private health insurance
• Other miscellaneous bills
• Random everyday receipts

Getting rid of your documents

How you get rid of your personal documents is your choice, mine is to burn.

Not everyone has a shredder, everyone has a bbq. If you don’t, you leave yourself wide open for thieves and scammers to go through your bins, find account numbers and other sensitive information for credit card use and empty bank accounts.

Filing

To keep all your important documents in one safe place, it’s wise to invest in some sort of home filing system that is easy to get to, find and manage the mass of family papers you have acquired along the way of life.

No need for fancy filing cabinets or a business corner, a simple filing folder can be kept in any room of the house. File all your bills and information in alphabetical order for quick easy access.

Or you can ditch the paper, go green and save it to a cloud. That strange space where you can magically save everything into thin air.

If you’re not tech savvy (and you don’t have to be), “The Cloud” is simply a trendy name for a network that can be accessed via the internet where you can manage all your information.

In other words, it’s a place other than your computer that you can use to store stuff. Failing that, swap your bank, electricity, finance and whatever other stuff you can for e-statements and everything is kept online. The cloud is extremely convenient.

However, I would recommend keeping hard copies of the seven-year or forever documents (just in case). Hacking is all around these days and it’s better to be safe than sorry.

Record-keeping of all your important documents is a painful process and a bit of a hassle, but an essential one nonetheless.

With a little bit of time and organisation and the check list above you can get your paper mess into an organised system.

How do you organise your documents?