How Long Should You Keep Your Financial Documents?

Springtime means spring cleaning, and for many people, that means going through the large stacks of financial records and receipts that have accumulated over the years. Sorting out what to keep and what to shred can be a headache, so we’ve put together a handy guide on how long you should hang on to certain documents.

Keep for 1 Month

• ATM Printouts
• Bank deposit receipts
• Credit card receipts

These documents can pile up fast, but you don’t need to keep them for long. Once you’ve compared them with your monthly statements and made sure all the numbers align, they’re safe to get rid of.

Keep for 1 Year

• Pay stubs
• Utility bills
• Canceled checks
• Bank statements
• Monthly/quarterly statements

These types of documents are important to keep for a while, but some of them become irrelevant once you receive annual documents. For example, you should keep your pay stubs until you can compare them with your W2 and annual Social Security statement. You can also get rid of any monthly or quarterly statements after you receive your annual statements.

However, if any of the documents in this category are needed for tax purposes, then you should keep them for longer. More on that in the next section.

Keep for 3 Years

• Income tax returns and any other tax-relevant documents
• Medical bills
• Canceled insurance policies
• Investment transaction records and annual investment statements

In most cases, the IRS can audit you for up to three years after you file your tax return. That’s why it’s crucial to keep any documents that support an item of income, deduction, or credit on your tax return for three years after you file your return or two years after you pay the tax, whichever is later.

Visit the IRS website for more information on how long you should keep tax records for specific situations.

Keep for 7 Years

• Records of satisfied loans
• Home sale records

These records may be useful in a variety of situations, so you should hang on to them for at least seven years after the final transaction is completed.

Keep Indefinitely

• Car title (until you sell it)
• Property deeds
• Records of paid mortgages
• Social Security cards
• Military records
• Marriage licenses
• Birth certificates
• Wills and other estate planning documents
• Adoption papers
• Death certificates

These should be considered essential documents and kept forever.

How to Store Your Documents

After sorting through your documents, you may wonder what to do with the ones you need to keep. You should store your most important documents, especially the ones that should be kept indefinitely, in a fireproof safe. For items that are important but don’t need to be referenced often, you could also keep them in a safe deposit box.

For less vital documents, such as receipts, pay stubs, and monthly statements, you can use a secure filing cabinet. All documents, regardless of their importance, should be kept in clearly labeled folders so that they are easy to find.

Digital documents should be kept in a password-protected file or external hard drive. These can include scans of important documents like birth certificates, marriage certificates, and passports.

Stay Organized with SharePoint Credit Union

If you want to reduce the number of papers you have to sort through every year, consider signing up for eStatements with SharePoint Credit Union. You can access them anywhere through our Online Banking platform! eStatements also save SharePoint Credit Union money on printing and postage, which lets us offer better rates to our members.

Visit our website to learn more about online banking and contact us with any questions.