There are many reasons why you should keep track of important financial documents. Take for example, a situation where you need to meet a financial advisor after a home flood. According to the Consumer Reports National Research Center, only 40% of Americans think they can find a document at a moment’s notice. Knowing where your essential documents are could help handle the situation smoother and without a time delay. Good record keeping also makes it easier to pay bills on time, find receipts, and reduce anxiety when tax season comes around.

So how long should you keep your financial records?

Sales Receipts

Unless you need the receipt for tax purposes, you can get rid of sales receipts after the warranty has expired or you can no longer return the item.

ATM Printouts

Keep for one month but after you balance your checkbook, throw it out.
Pay Stubs, Utility Bills, Cancelled Checks, Bank Statements, Quarterly Investment Statements
Keep these documents for one year unless you need them for tax season. If you do keep them for tax purposes be sure to hang on to the document for at least 3 years.

Income Tax Returns

Keep for three years. You can be audited by the IRS for no reason (up to three years) after you have already filed.

Medical Bills, Cancelled Insurance Policies

Keep for three years.

Records of Selling a house or Stock

Keep for three years. You need documentation for Capital Gains Tax.

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.

Satisfied Loans Records

Keep for seven years.

Keep while still 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)

Important Documents for Safekeeping

The following documents should be kept in a very safe place. You should also communicate the location of these documents with your family in case of emergency.
▪ Marriage Licenses
▪ Birth Certificates
▪ Wills
▪ Adoption Papers
▪ Death Certificates
▪ Records of Paid Mortgages

Financial documentation should not be taken lightly. Keeping track of your records will not only save you time and stress, but may also save you a few dollars down the road. Forgetting bill due dates is an easy mistake to make if you’re not in line with your financials. Remember to shred financial documents when they are no longer needed.