Conquering Financial Paper Overload

If you find yourself pawing through piles of paper at tax time, you're not alone. Consumer Reports Money Adviser says knowing what to keep and what to throw away are crucial to staying on top of your finances.

Not doing this can cost you. A Consumer Reports survey finds 16 percent of us have lost money because we couldn't find an important paper.

When Josephine Bentley-Vega was audited five years ago, she was panic stricken. For years she'd just stuffed her financial paperwork in boxes and bags.

Vega says, "I spent hundreds of hours with different piles of paper on the floor. And it was just a, just a nightmare."

Josephine has developed a much better system with the help of a professional organizer. Consumer Reports Money adviser's Greg Daugherty says a big hurdle in conquering piles of paper is that we don't throw enough out.

Daugherty says, "You only need to save your bank statements for one year, unless you use them to prove deductions that you claim on your tax return. Otherwise it's seven years, which is the same as your tax return."

You can also get rid of utility and service bills after you get the new bill. And consider going paperless.

Daugherty says, "You can avoid getting paper bills in the first place if you pay your monthly bills online."

But what about those bank deposits, credit-card receipts, and ATM records cluttering up your life?

Daugherty says, "You can toss these scraps after checking them against your bank or credit-card statements."

However, Consumer Reports says there are documents you should never throw away and that should be stored in a safe-deposit box.

Birth and death certificates, marriage licenses, Social Security cards, and vehicle titles are some examples.

When you're tossing stuff though, Consumer Reports advises using a shredder so that no one can steal important information by going through the trash.

Josephine says getting organized allows her to be more productive and a lot less anxious.

Another piece of advice from Consumer Reports-make copies of anything you store in a safe-deposit box so that you have them on hand for easy reference in case you need the information.

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