{This post is part of the Great Paper Challenge: From Piles to *almost* Paperless series.}
Now that you’ve set up monthly file folders, let’s talk about how to actually use them. It’s quite simple really, but I wanted to give a little detail for those who are new to this concept and for those who are trying to figure out what to do with receipts. (Remember, we’ll work on going paperless later in the series, but for now we’re dealing with any hard documents you may accumulate or need to keep throughout the year.)
When bills arrive in your mailbox:
- place in your in-box and pay the bill when you empty (hopefully this is a weekly occurrence, if not daily).
- write the date paid on the hard copy.
- file in the appropriate monthly slot.
When you get your monthly bank statement(s):
- reconcile your account by matching up your receipts to the charges shown on your account.
- resolve any discrepancies you may have found.
- staple receipts to the monthly statement.
Which receipts should you keep and which receipts should you trash?
- Receipts needed for tax purposes. Some people need to keep every single receipt for tax preparation. If you fall into this category, you most likely know…although, you may be in the habit of just throwing them into a shoe box instead of keeping them neatly organized. Other like to keep receipts to know how to calculate the dollar amount that’s tax deductible when an item is donated.
- Receipts for small regularly occurring purchases. For the rest of you, keeping 20 grocery receipts and 10 gas station receipts each month probably isn’t necessary. If for some reason you think you might need the information, scan the receipts and get rid of them, or keep them in your monthly folder until that same month the following year (or two years if you use even/odd year monthly folders).
- Receipts for big purchases. For large purchases like home improvements, furniture, electronics, etc. you may want to keep the receipts in a separate file folder. Why? The records may be helpful when pricing an item to sell and to convince the potential new owner they’re getting a good deal. The receipts can help calculate how much homeowners or renters insurance you need. They can even be useful when there’s a settlement for a faulty product (example: my Mac computer cord fried, I reported it and had to buy a new one. Apparently this was a common occurrence so there is now a settlement. In order to receive reimbursement, though, the original receipt is needed).
- Receipts that are scanned. If you are somewhat paperless already and have a scanner, you may be inclined to scan all (or some) of your receipts and then trash the hard copies. If that’s your method, have at it…just make sure your computer is backed up!
Action Items for Today
- Empty your in-box, pay bills and file them.
- Reconcile monthly statements.
- Determine if you need to keep all, some, or no receipts at all.
Let’s hear from you…
What’s your method for keeping receipts? Are they all in a pile? Do you scan receipts? Do you throw them all away?
Click here to read more about the Great Paper Challenge: From Piles to *almost* Paperless!
{ 1 comment… read it below or add one }
I have a 9×12 manilla envelope tacked to a bulletin board next to my desk. All the receipts for the current month go in the envelope. At the end of the month, I close up the envelope, be sure it’s properly labeled, and file it in my filing cabinet. At the end of the year, all that year’s receipts go in a box for the year and the box goes to the storage area in the basement.
The only exception is receipts for bigger purchases. I scan those receipts plus file them in a purchases folder. Our house has been broken into a few times and those receipts are necessary if we have to file a claim with the insurance company.
{ 1 trackback }