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What To Do With Paper Clutter?

I was visiting my parents recently with the intention of sorting out their income tax documents to make sure everything was in order for tax filing.

Then they kept coming with bags and bags of paperwork, “What should we do with this?”

I poured everything out onto the bed and started sorting – bank notices for GICs that had matured years ago, their copies of their wills mixed in with advertising that comes with bills and bank statements, receipts from 1989. You get the picture.

Related: How I decluttered and simplified my life

I ended up with a pile to be shredded, a much larger pile for recycling, and a nice compact box with labeled files containing their important paperwork.

What to do with paper clutter?

The non-stop stream of paper we get into our homes on a daily basis can be almost unmanageable. From bills to receipts, warranties, and junk mail, we all need a system to toss what we don’t need, manage what we might need, and be able to retrieve something when necessary.

First of all reduce the amount of paper that arrives in the mail. Immediately toss the junk mail addressed to occupant, flyers, pizza menus and charity requests (if you have no interest in donating). Consider eliminating (or reducing) the number of magazines and catalogues you receive, especially if you have no time to peruse them right away and they are stacked in a pile for “later.”

Have a good system for filing your bills, statements, important notices, invitations, and personal letters and pick a regular date to deal with them.

How Long Do You Keep Important Documents?

Yes, you will have to keep important paperwork. For how long depends on what it is.

1 month:

  • ATM receipts once you’ve confirmed the transaction on your bank statement.
  • Receipts for general purchases. Toss sooner if you’re confident you won’t be returning the item.

1 year:

  • Bank statements. Be sure to reconcile them on receipt and deal with any errors immediately.
  • Credit card statements. Again, confirm the statement is accurate and make sure any returns are noted.
  • Monthly or quarterly loan, mortgage, and investment statements once you receive your annual statement summary.
  • Utility bills.
  • Pay stubs. Check the final amount to your T4 for accuracy.
  • Property insurance policies – keep until renewed or changed.

7 years:

  • Tax returns. Save all documentation (receipts, T-forms) that back up the information on your tax return in case of audit.

Until you sell or no longer own:

  • Warrantees, receipts, and instruction manuals for appliances, electronics, furniture and other large or expensive items. The receipts will come in handy for insurance claims. Periodically cull through these files to remove paperwork for items you no longer own.
  • Home improvement bills. You can use some for various government rebate programs. These are handy when you sell your home if the buyer wants confirmation that the furnace really is brand new.
  • Transaction receipts and confirmations for your investment purchases to calculate capital gains (losses).
  • Car title and bill of sale and repair/maintenance paperwork.
  • Home documents including title and copy of mortgage,

Forever:

  • Birth and death certificates, baptism and confirmation certificates, marriage certificates, divorce decrees, adoption papers, military service records and discharge papers.
  • Wills and medical directives, social insurance cards, citizenship records, licenses to practice your profession, trust and power of attorney paperwork, legal case paperwork and contracts.
  • Burial plot deeds.
  • Life insurance policy paperwork.
  • Pension and retirement benefits agreements.

If the documents are irreplaceable store them in a safety deposit box (keep copies in your files). A copy of your will, power of attorney, or medical directives should be with your lawyer, executor and/or trusted friend or family member.

Related: What’s in your wallet?

Destroy old and unneeded paperwork by shredding.

Paperless Filing

To further reduce your paper clutter, consider e-services at your bank for account and investment statements and confirmations, and e-post or e-mail for your bills.

You can scan your paper files such as bills and receipts into your computer. Create subject folders and files. Back up you data regularly.

You can also access your files easily with off-premise servers such as CrashPlan.com that automatically saves your data.

No more paper clutter!

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19 Comments

  1. SavingMentor on September 8, 2011 at 7:03 pm

    I always find references like this very handy because I have a problem of keeping too much paper around. I went through my filing cabinet and purged a lot of stuff recently.

    I also stopped keeping all my receipts and started trashing them or refusing them at the cash much more often. Errors on my credit card statement happen so rarely, it just isn’t worth keeping them.

    Thanks for the handy list!

  2. Stocksicity on September 8, 2011 at 8:20 pm

    Nice work here. I haven’t been doing taxes long enough to store it for 7 years, but I plan on keeping them forever (or at least a lot longer than 7 years). My parents still have their returns from the early 90s.

    Same goes for my bank statements, I’ve had a bank account like 5 years ago, I still have the statements from there. But over the past year or so, all my statements have been electronic.

    And as for general receipts, I am not someone that returns items even if I don’t need it (I have a lot of stuff around here that I don’t need), so I usually don’t hang on to that receipt for very long.

  3. B Kelly on September 8, 2011 at 8:34 pm

    I’ll admit that I’m horrible with filing and my bills, statements & receipts are all over the dining room table, counter top, study table – it’s quite an embarassing sight. I sometimes wonder why I keep letting the bills come to the house, when I’m tracking & paying everything online?

    Once every six months (plus or minus), I’ll sit down for 3 straight hours and get it all sorted out. Until the next round I guess.. lol

  4. youngandthrifty on September 10, 2011 at 5:30 pm

    To reduce my paper clutter, I have turned to online banking and requested utility bills to be sent via email.

  5. The Wealthy Canadian on September 10, 2011 at 9:02 pm

    Because of the number of stocks I own, I’ve had to start making adjustments to the volume of annual reports and investment-related material arriving at my doorstep.

    I’ve noticed a decrease but I still have to work on it some more. Paper clutter can become overwhelming at times and it doesn’t take long for things to add up if you’re not organized.

    I tend to deal with my mail every day; that way, things are always organized and I’m on top of everything.

    Now that I’m on vacation, I’m not looking forward to the stack of mail that I’ll have to sift through in a few weeks’ time!

    Nice post!

  6. Lickety on December 16, 2012 at 9:56 am

    I purge every few months. I don’t keep credit card or bank statements. Once the money has been spent, it’s gone so I don’t see the point. I don’t use my debit card enough to have to track my spending. I keep my warranties. I write RTS on junk mail or better yet, if a postage-paid envelope is provided, I send them back their own junk and they pay for it. My mortgage documents, passport and insurance info is kept in a safe. Nearly all my bills are electronic. So all I really toss are weekly grocers fliers.

  7. Dan @ Our Big Fat Wallet on April 1, 2015 at 8:07 am

    I just finished sorting through the filing cabinet and it took an entire afternoon. I don’t consider myself a hoarder but I was surprised how much stuff was in there. Who really needs to keep a utility bill from 2008?

  8. Kurt on April 1, 2015 at 8:47 am

    Why is there still so much paper? I try to get e-reciepts from anyone that offers (Home Depot is great for this). I have a scanner app on my phone that scans straight to PDF so any receipts that I know don’t need an original copy get scanned and go straight in the trash. Everything regarding my banking is paperless. My pay stub from work is now paperless. All my utility bills are paperless. I don’t do this because I’m environmentally conscious, I do it because i HATE the piles of paper. Now if I could just get TD to stop mailing my investment stuff… That’s about the only financial mail I get, and it’s irritating. The only advice I have is if you have important documents scanned (like I do on my phone), make sure you back everything up, and often. There’s just no need for all this stupid paper.

  9. Michael O'Byrne on April 1, 2015 at 9:09 am

    Make a VERY simply system to organize receipts. If you make it complicated you won’t use it.
    Buy a small expanding file at the dollar store. We use one that is about 10cm x 23cm (4″ x 9″). They have larger ones if you want.
    Label each pocket with the month.
    Empty your wallet/purse as often as possible and put all the receipts in the correct month.
    They are now ready for easy retrieval if you need them.
    If you never need them then you dump them all in the trash Once you finish the year empty the next month (from last year) into the trash. Only empty one month at a time as needed.
    Alternately just pack the whole file away and get a new one for the next year.
    The beauty of this system is that it’s as simple or as complicated as you want it to be.

    If you want you can take a month at a time and sort them into groups to find out where you have been spending your money and possibly make a budget or alter your spending habits.

    Scanning is now very simple with most scanners or printers.

    Make a directory on your computer labelled PURCHASES
    Make a sub-directory for every year 2015 2014 etc
    Scan and file the receipts under each year.
    Always start the file name with the date like
    20150129 toaster oven.
    Making it yyyymmdd lets the computer sort it for you.

    When you purchase an expensive thing make a sub-directory for it under the year. Always start the folder name with the date as above.
    If you get a printed manual then scan it and file it on the computer. Now you don’t need to store the printed edition.
    An even better way is to visit the manufacturer’s website when you purchase anything and most times you can find an on-line edition of the manual. Download it and put it in your file. This saves you the work of scanning the manual. Manuals are usually available when the product is new but are often impossible to find a few years later when you actually need them.
    Also scan the warranty and to be super organised, make a note in your Google calendar (or whatever electronic calendar you use) to remind you when the warranty is about to expire. That way you can decide to get something fixed before the warranty expires not one month later as is the norm 🙂

    The key to being organized is KISS. The temptation is to make it far too detailed when you set it up. If you do this you won’t use it. KISS

    One more tip for those who have an office. You really should pay me for this one 🙂
    How often do you search through the trash for a note or something you threw out?
    Empty the large bottom drawer on your desk (the one you don’t use effectively right now.
    Make this your trash can. ALL paper goes in there. From notebooks to sticky notes.
    Now if you need that note you made last month you should be able to find it easily, it won’t have gone out with the trash.
    When the drawer gets full up, reach down to the bottom and pull out a thick wad of papers. Throw it in the shredder or recycle. Anything down there should be old enough to throw away safely.

  10. Kurt on April 1, 2015 at 9:54 am

    Michael – The manuals thing for sure. I realized a few years ago I had almost an entire file drawer of manuals from the miriad of products I had purchased over the year. EVERYTHING was available online, so I tossed it all.

    Also when you buy a product, check if the store will keep track of the warranty info for you. Most big stores (and online stores) will. Then you only have to remember your phone number when you go in.

  11. Shirley Smith on April 1, 2015 at 11:46 am

    Thank you, thank you! for the information of how to set up a computer file system of recording my long-term purchase items. I’m a very senior senior and seriously trying to go mostly paperless.

  12. Ashley on April 1, 2015 at 1:36 pm

    I found this an invaluable guide and do many of these things already, BUT I VEHEMENTLY disagree with one of your points.

    You just can’t throw out the pizza menus!!! They’re invaluable!! 🙂

  13. Diane on April 2, 2015 at 6:41 am

    If you find you are getting mail from charities, just call them and ask them not to contact you, by phone, e-mail or mail. They will do this. Also make a point of requesting that they not share your information with other charities. I did this several years ago and it has all stopped. It was a waste of their money and my time. I go online and make my donations when I’m ready.

    One caution for the 7 years for income tax. The 7 years starts from the LAST reassessment. So if you do a loss carry back for capital gains, it restarts the clock for those years, starting with the date on the reassessment. In order to know when I can toss the tax returns, I keep a simple spreadsheet with the date of the last reassessment and every January, I go to the file and toss what I can.

  14. Atticus on April 15, 2015 at 8:32 pm

    Hi Marie,

    Thanks for the good advice.

    However, I wouldn’t advise getting rid of statements after one year.

    According to the CRA’s Income Tax Information Circular IC78-10R5, statements are among the records to be kept for 6 years.

    Here is what the circular says:

    “Records to be kept

    5. For the purpose of this circular, a record has the meaning assigned by subsection 248(1) of the Act. A“ ’record’ includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether written or in any other form.”

    http://www.cra-arc.gc.ca/E/pub/tp/ic78-10r5/ic78-10r5-10e.pdf

    • Boomer on April 16, 2015 at 10:42 am

      @Atticus: Statements that show tax related payments should be kept for the recommended 6 years.

      However, if your statements are like mine with just bill payments and cash withdrawals, they can be safely shredded sooner.

  15. Mag on April 16, 2015 at 10:27 am

    I still have all the paperwork from the purchase and sale of my last 4 properties and they are huge piles of paper! It’s on my to do list to shred all but my current home agreements this weekend.

    I created a binder file system for all my paperwork and I have a binder for
    House – renovation receipts / invoices / home improvement and maintenance
    Auto – insurance policies, bill of sale and maintenance
    Medical – insurance statements for the current year, medical benefits, necessary test results
    Work – contracts
    Finances – investment accounts, mortgage agreement and statements, credit card and bank account agreements
    Taxes – keep 7 years, and property taxes for the year
    Manuals – all currently owned
    Personal binder for each member of our family with their name on it – copies of personal documents and anything else personal like cell phone agreements/plans etc
    I keep all documents in clear plastic sheets and plan to go through the binders every few months to make sure only the necessary paperwork is filed

    I used to be that person who had paperwork everywhere and I have to tell you getting this organized feels like a huge weight was lifted off my shoulders.

  16. Alice on January 9, 2016 at 3:06 pm

    My husband passed away 2 years ago. I know I have to keep his Income Tax return for 7 years.
    Question 1. Is it just the final return I keep?
    I have his RRIF quarterly statements dating back to 2001.
    Question 2. Do I need to keep any of these statements or can I shred all of them?
    Thanks…..

    • Diane on January 10, 2016 at 11:33 am

      You need to keep all documents that relate to income tax for 7 years from the last assessment/reassessment for that tax year. So for example as long as you did not have any reassessment and your income tax was filed on time, you could discard all documents dated 2007 or earlier, and you will be able to discard all documents from 2008 this summer, 2009 next summer, and so on. However if you did a loss carry back or anything else that required a reassessment you would need to go by the date of that reassessment.

    • boomer on January 10, 2016 at 11:43 am

      @Alice: Your clearance certificate covers all tax years to the date of death. However, picky person that I am, I would keep all returns for 7 years. Quarterly RRIF statements can be shredded.

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