Guest Author - Cate Brizzell

I've put it off long enough. It's time to hit my home office and organize files! Follow along as I share my year-end file organization plan.

I used to be oh-so-organized. My files were up-to-date and easy to follow. Then life struck, and stuff piled up, and before you knew it, the pile seemed to be too large to tackle! Unfortunately, a disorganized file system will cost you time and money, so it's important to either get back on track or get organized once and for all.

I've set aside an entire day early in the New Year to get the job done. I'm setting up a special spot in the house, complete with my favorite music, movies, snacks and drinks. I'm actually looking forward to a little solitude!

Right now we have an eclectic mix of file storage: cardboard boxes, plastic two-drawer cart, cheap wooden two-drawer cabinet and a tabletop file holder. I'm going to use the cardboard boxes to move archived files to the basement. The boxes are easy to label and stack, and very inexpensive. The cheap wooden file cabinet will go in the basement as well to hold household manuals and tax documents. The plastic two-drawer cart will hold our household and home business files, making them easy to access and move around the house. The tabletop file holder will be the perfect place for often-needed family files, such as the kids' activities, vacation, address file, and more.

I'm also going to stock up on hanging folders, manila file folders and file folder labels. Make sure your lables match your file folders! There are two-tab and three-tab versions available. I really like the look of printed file labels, so I usually pencil file titles in first and then print them up when I'm all finished organizing. For in-between labeling, I simply plop on a label and write the title in black ink.

If you're extremely color-oriented, you may want to pay extra for color-coded files and labels. Personally, since I don't know how many I'll need of each color, I prefer to use simple green and manila folders.

When it's time to start, I'll make sure my shredder is handy, as well as a stapler, paper clips and lots of trash bags.

The fun begins with a purge! I'm going to go through my "filing" stack and remove all bills and statements from last year and beyond. Since we keep all transactions in a Quicken file, it's easy for us to print up reports on our spending patterns without having to add up garbage utility bills from three years ago. Anything with identifying personal information will be shredded. Documents that remain to live another day will be put in appropriate files, ready to file.

Then it's time to purge the files themselves (and file those stacks of paper as I go). Files that need to be archived permanently will be moved to cardboard boxes in the basement. Files that need to be archived temporarily will be removed as well. All boxes will be labeled "PERMANENT" or "TEMPORARY", with discard dates written on the outside of the box.

Here's a quick list of the guidelines I'll be using as I work:

Keep Forever
permanent business records
irreplaceable or impportant personal documents, kept in fireproof safe
personal income tax returns and records
investment records for prior years (a binder works great, too)
real estate records

Six Years
business tax records, including returns and supporting documents
business financial statements
business credit card statements
expired insurance policies

Three Years
credit card statements
medical bills, Explanations of Benefits
utility records, if desired
expired insurance policies

Special Files
auto records, until car is sold
credit card receipts, until statement is verified
pay stubs, until verified on W-2
sales receipts for big-ticket items, stapled to manual with warranty info

It seems there are ever-increasing piles of paper to manage these days, despite promises of a paperless society. But with a little planning and a good system, you can stay on top of things and protect your personal finance interests.