Despite advancements in technology, we still haven’t got to the paperless society envisioned over 30 years ago. In fact, we seem to be drowning in paper. So what is the best way to sort out your paperwork and bills? How do you know what is important and how long to keep it? The stress that clutter creates is avoidable, so here are some tips on how to sort out your paper life.
Sherpa’s 6 steps to sort out your paperwork and bills
1. Develop a system
Handle Once - handle each piece of paper once.
Open and Sort - open your paper mail next to the recycling bin so you can get rid of what's not important straight away. Shred anything with sensitive details.
Split the Rest - into 4 piles: FILE, READ, PAY or DO.
Schedule Payments - set up payments electronically and set a reminder a few days before the due date. This will remind you to make sure there are enough funds in the account.
File Now – it gets a lot harder as piles grow bigger.
Keep it Handy - keep your reading file handy so you can deal with it when you get a spare moment.
- Cull Time - Schedule a time every year to cull what you don’t need
3. Go Paperless
- You can get most of your bills and statements electronically. Sign up for this wherever possible, but remember to download and save them somewhere that gets backed up. Most providers retain only for a short period.
4. Update your Details
- Keep your address details up to date with all companies you deal with.
5. Maintain an Inventory
- Keep an inventory of what you own and what you owe and let someone know where it is. You never know when you might need them to do stuff if you can’t.
6. Dump It
- Dump it as soon as it’s no longer needed.
What to Keep and What to Dump
1. Job Related Paperwork
- Keep your job application, letter of offer, any arrangements as to how you will be paid, performance reviews for as long as you work there.
- Dump these when you’re one year into your next job
- Keep payslips for the current year until you get your annual payment summary.
- Dump all but the last two monthly payslips (always keep 3 on file)
2. Your Finances
- Keep bank and credit card statements for as long as you have physical room for them (and at least the period required for tax). Credit card statements are great support if you have an insurance claim for a burglary.
- Dump when the product has expired.
3. Your Assets
- Keep receipts for any major asset (your car, boat or anything of value) together with a photo and any proof of ownership
- Dump when you no longer own the asset.
- Keep a file on your purchase (Agent’s flyer, purchase contract, settlement advice) and your loan (your loan application, advice from your broker, loan offer documents, your copy of the loan agreement and mortgage and every loan statement).
- Keep for the life of the loan.
- Keep rates, water, electricity, gas and repair bills. If you ever rent out your home, these bills can help reduce your future capital gains tax.
- Keep for as long as you own your
This includes the return itself, any calculations you made to get to the numbers on the form and documents supporting those numbers. This includes:
- Your payment summary
- Bank statements
- Dividend and interest statements
- Share certificates (CHESS Statements) and contract notes
- Receipts or credit card statements for work related expenses
- Your log book for your car and receipts for expenses
- Keep your tax records for 5 years from the date your tax return was due (or the date you lodged it if later).
Guarantees and user manuals
Keep these together. When you sell, replace or dump the item, do the same with the instructions and guarantee.
Dump when you no longer own the item.
Passwords and User names
One of the best ways to save this sensitive information is off-line. Keep a dedicated discrete notebook for this purpose; list all your usernames and passwords. Share with one person you trust; a person who might need them too.
- Keep this book or file in a safe place where you can access it easily.
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With over 25 years in Financial Services from consulting to management, Vince Scully is the go-to guy for wealth management and financial advice. Before creating Life Sherpa®, Vince founded the Calliva Group; a fund manager, product issuer, adviser and lender. Vince is an adviser to the Wealth Management Industry, and prior to his role as CEO at Calliva, a senior member of Macquarie Bank’s infrastructure team.