Cleaning your Financial House

Cleaning your Financial HouseWell it’s that time of the year again, when we need to clean up our financial house and tackle the piles of paperwork, documents and statements.

The question is: “What should I keep and what can I toss out?”

In today‚Äôs Financial Fitness tip, you’ll discover which short-term financial documents to keep. Since keeping good records can simplify your life. But too many records will create a mountain of paper that will just grow and grow over time.

The IRS states that the main reasons for keeping financial documents are for tax or insurance purposes, or for getting a loan.

Here’s what to do with the most common paperwork you may have piling up in your home…

ATM Receipts – These only need to be kept until you balance your checkbook.

Sales Receipts – These receipts should be kept until the warranty expires, or if for taxes, keep them for 3 years.

Pay Stubs – These should be kept until you can verify your income on your W-2 or 1099 form.

Cell Phone and Utility Bills – These can be tossed after you check for correctness. But if they are for your business, then you need to keep them for 3 years.

Bank and Credit Card Statements, and Canceled Checks – Keep these records for 1 year, unless they are for business purposes, then keep them for 3 years.

And one important note…

If you’re discarding any paperwork with your personal or financial information on them… like your full name and address, your social security number or any credit card or bank records… be sure to shred them first. This way no one can get a hold of them, and try to steal your identity, possibly creating accounts in your name.

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