How to Organize Your Paperwork

Steps to find important records quickly and easily

Woman organizing papers
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Most people don't think about an important document until they need it. If your papers are spread out everywhere and you don't have a central organization system in your home office, you can waste a lot of time and energy searching for things. You might even lose something.

Getting Started

With a few simple steps, you can organize your important paper documents: You'll need a small two-drawer filing cabinet or a portable hanging file box, hanging files in six different colors, manila third-cut, top-tab folders, and an optional fireproof safe. Or you can purchase a large binder and tab inserts. Now you're ready to start.

Gather Your Documents

Before you can organize all of your important documents, you must locate them. It is sometimes easier said than done. Check your home office drawers and the papers stacked on your desk or table. Check the piles of paper cluttering your kitchen countertops as well as kitchen drawers and baskets. Look on your bedroom dresser and nightstand. Last, but not least, check your purse or briefcase for important documents you are accidentally carrying around.

Categorize

The most important documents fall into one of the following six categories. Sort all of your gathered documents as follows:

  1. Home and property records: Mortgage, property deeds, home improvement projects and receipts, appliance manuals and warranties, property tax information, home insurance policies, and manuals
  2. Auto records: Titles, maintenance records, insurance policies and information, loan information, and payment records
  3. Health records: insurance policies, health insurance benefits manuals, explanation of medical benefits, doctor bills, prescription lists, flexible spending account information, medical receipts, medical directives, life insurance policies
  4. Financial records: Bank statements, tax returns, tax deduction records, investment records, loan records, credit card statements
  5. Electronics records: Mobile phone contracts and equipment manuals; sales receipts and warranties for computers, laptops, and tablets; cable and internet plans and bills; wireless router sales receipt and manual
  6. Personal records: Birth certificate, marriage certificate, divorce certificate, custody papers, Social Security information, immunization records, passport, military service records, baptismal and confirmation records, wills, funeral plan, and burial site information. You should have these for each family member. If you have pets, you can also include their important documents such as veterinary and vaccine information in this category.

Separate Vital Documents

Most of your important documents can be stored in a regular filing cabinet or portable hanging file box. Some, however, really should be kept in a fireproof safe or in an offsite storage option such as a safety deposit box.

Vital documents are ones that would be very difficult or time-consuming to replace. They may contain sensitive personal information that could be compromised by identity thieves if stolen. Meanwhile, if your home was destroyed by fire or flood, you'd want these vital documents to remain intact.

For most people, the following documents would be considered vital: Social Security information, birth certificates, insurance policies and agent's contact information, wills, property deeds, car titles, passports, and any contract or agreement that required an original signature.

Make a master list of all the vital documents you place in your fireproof safe or in an offsite storage option.

Duplicate Your Wallet

Most of us carry critical information in our wallet each day and would be seriously inconvenienced if it were lost or stolen.

Make copies of your driver's license, organ donor card, health insurance card(s), membership cards for the gym, library, grocery store loyalty programs, warehouse clubs, etc., and, most important, all credit and debit cards (copy front and back). Keep these copies with your other important paper documents.

Create a simple filing system

The simpler the filing system, the more likely you are to use it on a consistent basis. Take each category of important document and assign it a hanging file color:

  • Home and Property Records
  • Auto Records
  • Health Records
  • Financial Records
  • Electronics Records
  • Personal Records

Add the appropriate number of hanging files to your filing system for the number of documents you have in each category.

Use the manila folders and create a folder for each individual document within each category. Place the folders in the appropriate colored hanging file section.

If you purchased a large three-ring binder and tab inserts, label the tabs with the same record names, hole-punch all documents, and organize them. If the papers can't be hole-punched, put them inside a folder and hole-punch the folder instead.

If paperwork isn't your thing, this may be a freeing moment. You can scan all these documents, save them to a hard drive, and then shred the originals.

But use your own discretion as some paperwork is better left saved. Keep originals of all vital documents. Use your best judgment on the others. Most financial institutions are happy when you go paperless.

Ongoing Maintenance

Once your important papers are organized, keep them that way. Each month when you pay your bills, file any new documents in the appropriate section of your filing system. At the same time, look for any documents you removed from the system during the month that might still be out of the filing system. Re-file them. At least twice a year, review the documents in your filing system to see if any can be purged. A good schedule to follow is at the first of the calendar year and at the end of each school year.

With a little effort, you can reap long-term benefits and save time by organizing your important paper documents.