Money Management

This household filing system will save you time, confusion and money

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A Simple Household Filing System that Saves you Time and Money

 

How often have you had this thought? I need a household filing system that will save me time, confusion and money. Or have you said I knew I had that receipt a few days ago, now I can’t find it? Another common filing system question is should I keep this document or should I toss it out?

 

I had some of the same questions before I developed my household filing system.

Often times you may not know what to do with all of the daily papers that you receive. Therefore, these document can add up to a big pile of clutter that is out of control and frustrating to manage.

A Short Story about Joel

My friend Joel has always stored his important papers, receipts, and current bills in a box next to his favorite chair. He said often times he has to sift through the papers to find certain documents. Joel also said, sometimes he is charged a late fee on his bills because he didn’t find the bill until after the due date.

 

It was clear to me that Joel was spending extra time and money trying to manage his household papers. So, I helped Joel install a household filing system. As a result, he pays his bills on time and spends less time looking for important papers.

 

Likewise, many of us are similar to Joel we find a place in the house and free toss all papers on the pile. Some of us store our important papers in shoe boxes, the closet, under the bed, the kitchen table or behind our favorite chair.

 

Seems like finding a storage space is only one of the problems. The other problem is deciding how to organize your papers so that you can find them in a timely manner.

 

In today’s society, everyone has important papers that I call life documents. These documents tell your life story. They are your birth certificate, social security number, health records, marriage license, insurance policies and etc.

 

We all know the frustration and relief that comes with losing your papers and finding them a few hours later.

 

As a result, here is my simple household filing system that will save you time, confusion and money.

 

What You Will Need

 

A comfortable corner of a bedroom, living room or kitchen will do. Your space should be comfortable so you can spend as much time as need to manage your documents. Some homes are designed with home business centers. The centers are convenient and can be used by all members of the household.

  • A table or desk with a good light and a chair
  • An “in” basket or box for incoming mail.
  • An “action” file or box – for bills to pay, letters to answers
  • A file box (cardboard, wooden or plastic) or two-drawer cabinet – for storing the rest of the papers and receipts.
  • Manila or hanging file folders with right, center and left tabs.
  • Shredder
  • Fireproof or Safe Deposit Box
  • Label Maker or Pen
  • Waste Bin

 

Gather All of Your Papers Together in One Spot

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The first step in setting up a household filing system is to get all of your files and papers into the same space so that you can sort, recycle and shred. Having everything in one spot has some advantages:

  • You’ll be more thorough. Doing a swept of your home up front means you won’t have to repeat the task a few days from now when you find a forgotten stack of papers in the closet.

 

 

What should I Keep

 

When deciding what to keep, ask yourself these questions:

Do I really need to keep this piece of paper?

If I need to keep this piece of paper, where should I keep it?

How long should I keep this piece of paper?

Can I find this piece of paper if I decide to keep it?

 

You should keep information related to current and last year’s taxes; medical records; bills; insurance policies; warranties; copy of your will; inventory of safe deposit box, etc.

 

Original items that would be difficult to replace, or are irreplaceable, should be stored in a fireproof safe deposit box in your home or bank. These include birth and marriage certificates, deeds, wills, irreplaceable receipts, and household inventories.

Photocopies of documents can be kept for reference purposes.

 

 

Separate the Papers into Six Categories

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You must make a decision about each piece of paper. Each piece of paper should fit into one of 6 categories.

Action - Papers you need to take action on and then discard. Examples: invitations, appointments notices, bills, subscription renewal, etc.

Annual Archive  - Papers or documents you need to keep and use once or twice a year. Examples: tax return receipts, auto registration, leases, maintenance agreements, etc.

Household - These are papers you use to keep your daily life running. Example: common receipts, user manuals, monthly bills etc.

Permanent Files – Hard to replace documents that you need less often. Example: deeds, court documents, insurance policies, birth certificate, passport, wills, etc.

Recycle - Papers and documents that don’t fall into any of the categories above and contain no personal information. Examples: junk mail, old magazines, used envelopes, outdated coupons, etc.

Shredder - Items that do not fit into categories 1-4 but do contain personal identifying information.

 

Have a Household Filing System Party

Neal Jenning Flickr

Recycle Category

Your biggest pile will be the recycle. Start with this pile. The goal here is to reduce the amount of paper you’re shuffling as quickly as possible.

Shedder Category

Work the shredder. This should include anything that identifies you beyond your name and address.

Now that you have tossed the junk, let’s start setting up your filing system.

Your system will be easy to use, flexible enough to accommodate life changes, and secure so when you need to find something fast, you can find it.

You have the option to break the categories down further depending on the volume of papers that come in and out of your home.

 

Set up Your Annual Archive File

These are paper that you need infrequently. They should be reviewed annually. Examples: retirement statements, investment documents, life insurance policies, home/renter’s insurance policies, other legal documents, annual credit reports.

Store these papers in labeled folders and store in a fireproof box. Generally, if you are dipping into your Annual Archive file too often, make a copy of the document and store in another file.

 

Arrange Your Household File

Place these papers in the most accessible drawer in a file cabinet or easiest –to-reach boxes. You can also store some of them on a computer hard drive that is backed up consistently to a computer disk or jump drive.

Store anything you may need in the near future.  Things that have short due dates, notes and reference materials for upcoming projects you’re working on. Receipts for big-ticket items, receipts for taxes, proof of payment statements, veterinary records, credit card information, memberships, and subscriptions.

 

Prepare your Action File

The Action file is the papers you need to take action on and then discard. Any document or paper that needs to be filed for a long period of time (over a month) probably belongs in the household file. Examples are; incoming mail, debit card receipts, invitations to upcoming events, bills to pay, appointment reminders, online sales receipts in case of returns.

I recommend going through this file every week. This will keep the activities in this file fresh on your mind.

 

Permanent Files

These are the most important papers that you own. They are proof you and your family exist. Examples: birth and death certificates, social security numbers, citizenship and naturalization documents, deeds, diplomas, Military discharge papers, marriage licenses, marriage dissolutions, adoption decrees, Federal and State tax returns, vehicle titles.

 

 

Finally, your filing system is complete therefore you only have to keep your system up to date. Consequently, no more wasted time to look for that lost receipt or warranty. You will always know where your very important documents are.

Your filing system will help keep you on schedule for bill payment, appointments, and time-sensitive events.

Above all, I know that you will be as happy as Joel and I with your new file management system.

What are your paper management issues? How do you organize your documents?

Because your thoughts are important to me, I would love to read about your household filing system. Just send me an email to bobby@clarkonmoney.com

 

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