Keep or Toss: Tips for Organizing Financial Records

By NYMetroParents Staff April 18, 2013

The Better Business Bureau provides tips on how to organize financial records. Learn if you should throw away credit card receipts, keep canceled checks, and advice for keeping your financial paperwork in order.

Spring is finally here and for many, spring cleaning includes clearing out the clutter and paperwork that has accumulated over the past year. However, when it comes to financial records, not knowing what to keep or for how long can be trouble.

“Many people are unaware of how long certain records must be kept,” said Claire Rosenzweig, President and CEO of the Better Business Bureau Serving Metropolitan New York. “Having a solid records retention plan will help you reorganize and be ready should you need to find something.” Rosenzweig also suggests that your records retention plan include a crisis management element regarding safekeeping of your critical information.

The Better Business Bureau suggests the following record retention system as a reasonable approach for many people:

Canceled checks: Those with no long-term significance for tax or other purposes probably can be destroyed after about a year. But canceled checks that support your tax returns, such as charitable contributions or tax payments, probably should be held for at least seven years – long enough to cover the six-year tax assessment period that starts when you file your tax return for the year the check was written. Keep indefinitely (for other tax reasons) any canceled checks and related receipts or documents for a home purchase or sale, renovations or other improvements to a property you own, and non-deductible contributions to an Individual Retirement Account.

Deposit, ATM, credit card and debit card receipts: Save them until the transaction appears on your statement and you have verified that the information is accurate.

Credit card and bank account statements: Save those with no tax or other long-term significance for about a year, but save the rest for up to seven years. If you get a detailed annual statement, keep that and discard the corresponding monthly statements. Be sure to mark closed deposit accounts as such, so your heirs do not waste time wondering what happened to the money.

Credit card contracts and other loan agreements: Keep for as long as the account is active, in case you have a dispute with your lender over the terms of your contract.

Documentation of your purchase or sale of stocks, bonds and other investments: Retain these while you own the investment and then seven years after that.

To avoid becoming a victim of identity theft, be sure to shred any document that contains a Social Security number, bank account number or other personal information (especially financial information), before tossing. Click here for additional information on protecting yourself from identity theft.

About BBB Serving Metropolitan New York

For more than 100 years, Better Business Bureau has been helping consumers find businesses, brands and charities they can trust. In 2012, consumers turned to BBB 124 million times for Business Reviews on more than 4.5 million companies and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for 113 local, independent BBBs across the United States and Canada, as well as home to its national programs on dispute resolution and industry self-regulation. The BBB Serving Metropolitan New York was founded in 1922. Please visit newyork.bbb.org or bbb.org for more information.