Paper Piles Be Gone: Part Two

Once you find a way to manage your short-term files and things that need attention (see my suggestion here), it's time to move on to long-term items.

Most of the papers I keep long-term fall into two categories:
1) Financial
2) Tear sheets, recipes, ideas and inspiration

This post pertains specifically to the first category - financial. I'll cover category #2 in a future post.

I used to have a filing cabinet with a folder for each different category and bill, which is a logical way to file items. The problem I found with this is that the files eventually get really full to the point where I'd stop filing and start piling until I could get around to cleaning out the whole cabinet. Then I would have to spend a lot of time filing all the things I couldn't file because it was impossible to cram one more piece of paper into the file.

Here's the solution:

1) Acquire a file cabinet, box, etc if you don't already have one. I only use one drawer of my small filing cabinet so I could change to a filing box. Also, I prefer hanging files. You can purchase kits to convert regular file drawers into hanging files, but it's better to just start with a hanging file if you can.

2) Label 12 folders with one month of the year.

3) Once you pay your bill, review your bank statement, etc., put it into the folder for that month. Once the month is over, move it to the back of the 12 months so that the current month is always the front file. I've found that there really isn't any need to file things by payee, bank, etc.

4) At the beginning of the month, go through the papers in the corresponding month's file and shred anything you don't need anymore so you can start adding the new items. This way the file is cleaned out once a year with very little effort. You can usually toss everything, but occasionally you have something that you need to keep indefinitely. I have one file for these items labeled "Long-Term Financial Info"

5) Set up other folders based on your needs. Examples of other files I have:
* Current Taxes: Put tax related receipts and other papers into this file instead of the monthly file so that everything is together in one place at the end of the year.
* Taxes: File for past tax returns

In the next organizing post I will cover how long you need to save specific items.

(All of the above pictured file items are from The Container Store.)