Our Thoughts

Financial Records: When is it OK to shred?

Each year we have conversations with clients and friends who are moving, upsizing, downsizing, or just taking the opportunity of the cold season to stay in and sort through their home offices.  As technology develops each year, we are presented with new and innovative ways to store and manage the paper that seems to accumulate in our homes.  Here, I will attempt to provide some helpful tips for managing your home office, making sure you keep what you need, and safely destroying the rest.

It is always more rewarding to start with throwing away what you don’t actually need.  Before you throw anything away, we recommend you use a shredder or shredding service for any documents or receipts that may show your name, address, phone number, SSN, or other financial data.  If you have a significant number of documents and receipts that need to be shredded, then there are several community events (some sponsored by Fairfax County or local shredding companies) throughout the year that you can utilize.

The discard pile can include receipts (as long as you are not planning to use them for tax deductions or expense reimbursements), paid utility bills, old monthly and quarterly account statements (if you have annual statements), old investment prospectuses and brochures (particularly if you no longer own that investment).  If you find that you receive statements on paper and you prefer to have online access, Schwab, Fidelity, and most banks offer online statements which allow you to access prior statements without you having to store them on your desktop.

There are certain items you should keep original copies of, either in a fire safe at home or safe deposit box at your bank. Some examples include; estate documents (wills, powers of attorney, and trusts), marriage and birth certificates, social security cards, military records, naturalization papers, adoption records, deeds and mortgage notes for your real estate, and titles to your vehicles (until sold).  Other documents to keep in files include insurance policies and declarations, tax returns (for at least 7 years), year-end statements for investment and banking accounts (for at least 1 year, or longer if they are related to taxes, businesses expenses, home improvements, or mortgage payments), and receipts or bills for large purchases (such as home improvement projects or insurable items).

If you prefer to have ready access to these documents there are several cloud based (online) and server based (on your personal computer) storage options.  As with any cloud based option, internet security is an issue, and you should encrypt and protect any document before posting it online.  The major players in the online storage market include DropBox, SugarSync, and SpiderOak.  While DropBox is the current market leader, both SugarSync and SpiderOak have more developed client side encryption, which means that you have more security against identity theft.  One down side of both SugarSync and SpiderOak is that with greater encryption, comes slower upload and site speed.

Once you have documents online with (hopefully) secure passwords (not “password”!), you may find that you have too many passwords to remember. Hint: Don’t store your passwords on a piece of paper in your desk!  I use and recommend PassPack (www.passpack.com) which is a (limited) free service for storage of usernames and passwords.  In addition, there are some very useful features on PassPack that allow you easy “one click” access to secure sites, as well as the ability to share a password (or multiple passwords) with other users.  For example, I share the passwords for my banks, credit cards, and major utilities with my husband which means that we are never texting or emailing passwords back and forth.

Security is paramount.  If you decide to keep electronic copies of sensitive papers on your home computer, you still need to password protect them.

Now, you have a much cleaner office and hopefully some ideas on how to keep it that way. FJY works with a number of very talented professional organizers and would be happy to refer you on if you need some further assistance.