Paper Paranoia

By admin|September 13, 2017|Blog|0 comments

Revolution Step #3

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We’re at the third step of our Revolution and it may seem minuscule, but “paper paranoia” can be a very real obstacle. 

Having helped several clients through it and seeing their struggles, I felt it definitely needed to be listed as a Revolution maneuver.

As I think about this topic, my mind goes back to the movie, Close Encounters of the Third Kind.  Do you remember that movie?  Remember how Richard Dreyfuss kept building mounds out of everything….including mashed potatoes?  Well, how about paper??  Yep…paper mounds! Piles and piles of mail accumulated over time. Lots of time….years even.  It is a real problem and for those with small spaces, it can be very debilitating.

One client told me that she was literally “scared” to open the mail and would put it in drawers all over the house.

I finally convinced her to gather it up and we would go through it together.  After three hours of opening and sorting, she ended up with a small stack of bills and things to take care of.  I remember her saying she felt an unbelievable sense of relief.  Almost like finally getting the nerve to look under the bed or in the closet just to find there wasn’t a big bad monster in there after all. 

In the last two years, I’ve had several more clients with “paper paranoia”.  It may not start out that way, but once the mounds start getting bigger, the fear of what’s really in there begins to build.  They didn’t want to go through it because ….  I mean….what if….there really IS something in there!

Truth is…… there IS!  And …it needs your attention.If this sounds all too familiar and you are looking around your house seeing those piles, keep reading. 

Research has found that the development of paper piles can affect our ability to make decisions, finish projects or plans, handle basic financial matters, or even run a household.

Cluttered spaces can affect us emotionally, mentally and physically.

I recently worked with a client that had never thrown any paper away…ever.  Now, that might not be that big of a deal for someone in their twenties, but this lady was in her eighties. You can only imagine the piles.  She stashed mail in trash bags, boxes, drawers in every room and even suit cases.  Her basement was so full you couldn’t walk for the bags of paper. 

If “you” are that person, it’s time to look that paper monster square in the eye and deal with it.  Here are some time frames to help you with your mountain of paper:

This is from “Suze Orman, Financial Solutions For You, Report” which outlines the timelines for most financial and non-financial family documents. Take a look and then proceed to the piles…..

Keep till warranty expires or can no longer return or exchange:

  • Sales Receipts(Unless needed for tax purposes and then keep for 3 years)
     

What to keep for 1 year:

  • Paycheck Stubs(You can get rid of once you have compared to your W2 & annual social security statement)
  • Utility Bills(You can throw out after one year, unless you’re using these as a deduction like a home office –then you need to keep them for 3 years after you’ve filed that tax return)
  • Cancelled Checks(Unless needed for tax purposes and then you need to keep for 3 years)
  • Credit Card Receipts(Unless needed for tax purposes and then you need to keep for 3 years)
  • Bank Statements(Unless needed for tax purposes and then you need to keep for 3 years)
  • Quarterly Investment Statements(Hold on to until you get your annual statement)

What to keep for 3 years:

  • Income Tax Returns(Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. If you omit 25% of your gross income that goes up to 6 years and if you don’t file a tax return at all, there is no statute of limitations.)
  • Medical Bills and Cancelled Insurance Policies
  • Records of Selling a House(Documentation for Capital Gains Tax)
  • Records of Selling a Stock(Documentation for Capital Gains Tax)
  • Receipts, Cancelled Checks and other Documents that Support Income or a Deduction on your Tax Return(Keep 3 years from the date the return was filed or 2 years from the date the tax was paid — whichever is later)
  • Annual Investment Statement(Hold onto 3 years after you sell your investment.)

What to keep for 7 years:

  • Records of Satisfied Loans

What to hold while active:

  • Contracts
  • Insurance Documents
  • Stock Certificates
  • Property Records
  • Stock Records
  • Records of Pensions and Retirement Plans
  • Property Tax Records Disputed Bills(Keep the bill until the dispute is resolved)
  • Home Improvement Records(Hold for at least 3 years after the due date for the tax return that includes the income or loss on the asset when it’s sold)

Keep Forever:

  • Marriage Licenses
  • Birth Certificates
  • Wills
  • Adoption Papers
  • Death Certificates
  • Records of Paid Mortgages

Okay, so now you know what to do with all that paper.   Go through all those drawers or wherever you’ve stashed all that stuff and put it in its place.  And, if you’re the techy-kind, put that stuff in digital form.  Keep a copy in your lock box and another one in a designated place at your home. 

Now….What to do with all that room??

 

 

 

 

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