The Paperwork You’ll Be Glad You Kept When Life Gets Expensive

I don’t know about y’all, but I’ve got the horrible habit of keeping all sorts of stuff because I think I’ll need it one day. It is a habit I got from my mother who kept every single bill and receipt ever. The problem is when I do need something, I can’t remember where I put it. Was it in a folder? In a drawer? In that pile of stuff that I was going to sort out three months ago? I know I had it if I could only remember where. 

And then there’s the moment you finally decide to clean up and throw out all that stuff lying around or in the bin on the floor only to discover two weeks later one of the things you threw out was the very thing you need right now. 

I’m not saying be like my mother and keep every receipt you ever got since 1998, but there are some things that can save you a whole lot of hassle when something unexpected comes up. When dealing with things like major home repairs, applying for finance, doing your taxes, or trying to sort out an insurance claim, having the right paperwork can make an already stressful situation a whole lot easier.

Keep Records of Major Household Purchases

Most people don’t give a whole lot of thought to the paperwork that comes with buying a new fridge, washing machine, TV, etc. They get it home, get things set up and into the garbage all of the paperwork goes. That is until you need to return something a week later or show your receipt for the warranty claim. I do my best not to do that. I actually have a pretty great system. 

All receipts for any large or major purchases, especially things with warranties or that could be repaired, get a picture taken and then stored in my cloud storage folder. Then I staple that recipe to the inside of the repair manual. I know it sounds silly but I have one office box that all manuals go in. So it may take me a minute to get through them but they are there. 

Also, make sure you write down or take a picture of the serial and model number. I usually just write those on the manual but sometimes I take a picture, print it, and tape it to the book. It is easier to get those numbers when you first take it out of the box or it gets delivered than it will be to have to move it around later for the numbers. 

Don’t Throw Away Home Improvement Records

If you own your home, you’ll want to keep records of major repairs and improvements. Things like replacing the roof, getting a new heating/cooling system, rewiring, kitchen renovation, etc. Invoices, contracts, permits, payment records, etc. can come in handy if you need to do warranty work, or have a dispute with a contractor.

They can also be useful when it comes to selling your home. Depending on your situation and local tax rules, some improvements can affect the cost basis of the property.

You can also find it useful to keep records of even minor repairs, especially if it’s for an ongoing problem. If you’ve had the same plumbing issue fixed 3 times, you’ll want to know what was done previously, and how much you’ve already spent on it.

Keep the Documents that Show Your Income

Income paperwork is one of those things that’s easy to overlook until you need to provide it to someone. Pay stubs, employment records, tax returns, bank statements, etc. can all be useful when you’re applying for finance or need to show your financial situation.

This is especially true if you’re self-employed, freelance, have multiple sources of income, etc. Your income might be perfectly stable, but it can be more difficult to show that to a lender if you don’t have a traditional paycheck.

For example, people looking into low doc loans might be looking for finance options that can accommodate people who can’t provide the usual employment and income documentation. These loans can have different eligibility, costs, lending conditions, etc. It’s important to understand these things before applying.

Keep Your Tax Paperwork Organized

Tax time is stressful enough without having to spend three days looking for receipts you know you kept somewhere. Rather than waiting until it’s time to do your taxes, it can be a good idea to have a folder for each tax year. Keep relevant income statements, deductible expense records, charitable donation receipts, etc. in there as you get them.

If you have a small business or make money on the side with a hustle, it can save you a lot of time to keep business expenses separate from personal ones.

It can also be useful to work with an accountant to help you understand what documents are relevant to your situation. For example, if you’re looking for bargo taxation services, you might want some professional help in organizing your financial records, doing your tax returns, understanding your reporting obligations, etc.

Keep in mind recordkeeping requirements can vary depending on where you live and the type of documents. Some records only need to be kept for a certain number of years, while others need to be kept for much longer. Make sure you check the rules that apply to your situation before you throw anything important away. For example in the United States the standard is typically to keep records for seven to ten years.

Keep Your Insurance Information

Insurance is one of those things we pay for every month, but hope we never have to use. Unfortunately, when something does happen, the last thing you want to be doing is searching for your policy number while you’re trying to deal with a flooded bathroom, storm damage, etc. Keep copies of your insurance policies, coverage details, renewal notices, contact info, etc. somewhere you can easily access them.

It can also be a good idea to take photos of valuable household items and keep an inventory of your major possessions. If you ever need to make a claim, having photos, receipts, serial numbers, etc. can help you document what you had. Don’t forget to keep correspondence from previous claims, like estimates, payments, repair records, etc.

Medical Bills and Payment Records Can be Important, Too

Medical expenses can add up before you realize how much you’ve spent. Between appointments, prescriptions, insurance payments, unexpected procedures, etc., it can be hard to keep track of everything.

Keep important medical bills, insurance explanations of benefits, payment confirmations, receipts for expenses you might need to document, etc. These can be useful for spotting billing errors, verifying that you’ve already paid for something, or disputing a charge that doesn’t look right.

You don’t necessarily need to keep all routine medical paperwork forever. It’s just important to understand what records are relevant for ongoing treatment, insurance claims, potential tax deductions, etc.

Make Digital Copies of Important Documents

Paper folders are great until you need something and you’re away from home. Scanning important documents or taking clear photos can make them easier to find when you need them. Keep those copies somewhere secure, preferably with a backup.

You can organize your digital folders into categories like household, insurance, taxes, medical expenses, major purchases, etc.

Be careful with documents that have account numbers, identification details, etc. on them. Keep them somewhere secure with strong passwords, and other account protection if possible.

And don’t throw away original documents just because you’ve scanned them. You might still need original documents for some legal, financial, identification, etc. records.

Have a System That You’ll Actually Use

You don’t need to have a fancy filing cabinet or a complex spreadsheet to keep your paperwork in check. A few labeled folders, a small document box, or a simple digital filing system might be all you need. The key is to make it easy enough that you’ll actually use it.

If you have to spend 20 minutes figuring out where to put a receipt, you’ll probably end up piling things on the kitchen counter again. (From experience, I can tell you that those little piles have a knack for multiplying.)

Take a few minutes each month to file new documents, throw away things you don’t need anymore, and make sure important records are where they’re supposed to be.

You might not appreciate those few minutes right now, but you’ll certainly appreciate them when something unexpected happens.

A Little Organization Can Save You a Lot of Hassle

Nobody likes dealing with paperwork, especially when it comes to bills, repairs, unexpected expenses, etc. But keeping the right documents can save you money, save you unnecessary frustration, and help you make better decisions when life gets expensive.

You don’t need to organize every paper in your house this afternoon. Just start with the important things, find a system that works for you, and build on that.

And next time the washing machine decides to quit on you, or you need to prove you bought something three years ago, you might actually know where to find the paperwork.

Personally, I’d take that as a pretty good reward for spending an afternoon sorting through folders.