Bills: What to keep, what to trash

You know you have to do a massive clean-out, but what do you keep and what do you trash? Many people have had the unfortunate experience of finally throwing the guarantee form stuck on the fridge for 10 months only to have it break down the next week. So here are some guidelines to keeping your papers under control.

Bills: What to keep, what to trash 

Iona Minton
Wed, 28 Sep 2005

This article is a printout from iafrica.com
Copyright © 2000 iafrica.com*, a division of Metropolis*

You know you have to do a massive clean-out, but what do you keep and what do you trash? Many people have had the unfortunate experience of finally throwing the guarantee form stuck on the fridge for 10 months only to have it break down the next week. So here are some guidelines to keeping your papers under control.

There is more to good record keeping than being able to find a receipt in less than 30 seconds. You will increase your living space, unclutter your mind, pay bills on time and remember important dates.

There are two types of people when it comes to record keeping — gatherers and recyclers. Some hold onto everything while others throw out everything, including important documents. The best place to be is somewhere in the middle.

One of the big motivating factors to keep everything from 10-year-old electricity bills to the last decade’s tax returns is the fear that some bureaucrat will discover a mistake in his record keeping and accuse you of not paying a bill. And while it is indeed a good idea to hold onto tax returns you can let go of those water bills.

The rule of thumb is that bills that aren’t related to your taxes, ownership of goods or investments or debt commitments, should be kept for a year. For example, a year is enough holding time for medical, phone and electricity bills. However, if you work from home you might want to hold on to the phone bills and receipts related to your business for an extra year.

Like credit card statements, most bills can be reproduced if required. Some creditors allow you to download half a year of historical statements from their website. More complex documents like legal documents or real-estate records should be kept indefinitely. Documents that are difficult to reproduce (birth certificate, ID, passport) should not only be stored in a safe place, but notarised copies should be made and stored at a different location. The original documents should be stored in a fireproof box or a safe.

Tax returns and title deeds

Experts recommend you keep income tax returns for seven years, and title deeds until the sale of the asset. Divorce papers should be retained forever. Tax correspondence reports for business reimbursements and charitable donations should be kept for at least three years.

Investments

Keep bond and lease information for three years after the debt has been paid. Records pertaining to investments, stocks, and unit trusts should be kept for three years after sale. Insurance policies, life policies and disability agreements must be retained for three years after the policy matures or is collected on. Cancelled cheques should also be held for three years.

Personal bank statements, deposit slips, phone, water lights, and other household bills can be discarded after one year. M-Net and DSTV and other short-term contract documents should be kept for six months after the service has expired.

How to do it

Buy some files and file those documents. It is a great feeling to know that you paper work is in order.

Make copies of important documents and store them away from your house in case of a fire or burglary. It’s also not a bad idea to let a close family member know about the files just in case you leave this world prematurely. The first time you get asked for a document and confidently lay your hands in it under 30 seconds, you’ll know that the effort was worth it.

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