How to spring clean your bills, files & finances

How to spring clean your bills, files & finances
Posted by James Hood

If you want to be financially stable, independent and free of debt for life, you need to be financially tidy. That means getting your bills, letters, receipts and other bits and bobs in order. Yes, we know, it can be tempting to shove them all in a drawer or a shoe box and worry about them another day. But that’s how things spiral out of control. Trust us, we’ve been there. Here’s a guide to getting your household paperwork (and thus your life) in order.

What you need to do:

Step 1. Get it together
Gather up all the documents you have received and want to sort. Remember you might have stashed a few down the side of the sofa or left some by the door. Get them all.

Step 2. Time for a shredding fest
If your pile of paper would put the Eiffel Tower to shame, it’s time for a cull of all the c*@%. Contrary to what many people believe, you don’t have to keep every single bank statement or bill you’ve ever received. As a very general rule, you can save one year’s worth of most of your paperwork. Just use your common sense when it comes to employment or tax documents. And remember to dispose of any documents safely – identity theft is rife. 

Step 3. Get sorting

You’ll need six piles. These are:

Bills and bank statements
Keep utility bills for about a year and the same goes for your bank statements. HOWEVER – if you’re planning on applying for a mortgage or loan any time soon you might want to hang on to two years’ worth.

Savings and investments statements
ISAs, bonds, property – whatever you got, keep a record of it in this pile.

Tax stuff
This includes pay slips, a P45, P60 or anything that might relate to your tax. Are you self employed? This is where you’ll need to store all records and receipts for HMRC.

Insurance policies
Car, home contents, travel and any other policies that you might need to refer to.

Warranties, big-purchase receipts and manuals
How many times have you wondered ‘where on earth is that warranty for my dodgy toaster? Well, now you have a place for them.

Forever docs
For really, really important stuff. This includes deeds if you’re a home owner. But even if you’re not, keep things in here that you wouldn’t want to be without, like a passport, a will or birth certificate.

Step 4. Store it, securely
Whatever you use to store all your household paperwork, you’ll need compartments for each of the piles mentioned above. Whether you want to create six different ring binders or buy a filing chest with hanging files (Staples sell them for around £60), just make sure you keep your piles neat and organised. You’ll thank us next time you have to renew something. Some people also advise keeping everything in a fire-proof steel container, but that’s up to you. At the very least, we recommend making your ‘Forever Docs’ easy to access, so you can grab it at a moment’s notice.  

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