Financial paperwork can accumulate over time, becoming a burden in a cluttered household. Though some paperwork is important to keep, other things are safe to throw away, according to KJRH-TV.
One of he first steps in reducing a collection of paperwork is determining why it is being kept in the first place, the source says. Some paperwork may be important for tax records, insurance information or loan applications.
"Good records will help you identify sources of income, keep track of expenses, prepare your taxes, support your tax return, and keep track of the "basis" of your property [the actual cost of your home and any improvements]," the source says.
The source suggests individuals make a Record Retention Plan. Though it is possible to make one from scratch, IRS Publication 552 also provides an outline and some guidance on this issue, the source says.
Overall, the source suggests keeping old tax returns, holding on to receipts and old checks up to the years following the purchases for small items, unless self-employed, and holding on to receipts for big ticket items forever. Additionally, the source advises to keep all life insurance policy documents until a term life insurance policy ends or until death for permanent insurance coverage.
Many experts recommend informing spouses of the whereabouts of such important documentation, so they will be easily accessible should a tragedy occur.