Ever feel like you’re drowning in a sea of paper? Sort the paperwork today and reap the rewards tomorrow.
Life can be complicated enough without all the administrative paperwork that often accompanies it. This is particularly true when it comes to your personal finances.
If stacks of old bank statements, utility bills, receipts, insurance and superannuation documents fill your filing cabinet, perhaps its time to de-clutter, simplify your finances and improve your quality of life today.
Why simplify?
There are many good reasons to pare back on your financial record-keeping, including:
- Living in smaller dwellings means we have less space for storage
- Saves time by making it easier to find what you need
- Helps your loved ones find relevant documents easily should something happen to you
- In the event of a home emergency, you can quickly find important documents you may want to take
- Makes your life easier at tax time.
What you need to keep
When it comes to identifying the documents you need to keep, considering your legal obligations is a good place to start.
The first of these is your annual tax return. In order to complete your tax return you’ll need documentary evidence of:
- all payments you’ve received, such as wages, interest, dividends and rental income
- any expenses related to income received, such as work-related expenses or rental repairs
- the sale or purchase of assets, such as property or shares
- donations, contributions or gifts to charities
- private health insurance cover
- medical expenses, both your own and those of any dependents.
You need to keep these documents for five years after you lodge your tax return in case you’re asked to substantiate your claims, and it’s also a good idea to keep your notice of tax assessments for five years. However, if you run a small business, the document requirements and timeframes different – find out more at the Australian Tax Office (ATO).
The second category of documents are those related to property such as:
- property deeds
- home loan documents
- renovation approvals
- warranties relating to work undertaken.
Other documents to keep include:
- wills
- tax file numbers
- powers of attorney
- birth certificates
- death certificates
- marriage certificates
- immunisation records
- passports
- current insurance policies, such as your life, home and contents, and motor insurance
- your most recent superannuation statement
- any personal loan documents
- vehicle registration
- vehicle service history
- business registrations
- qualifications documents.
What you can throw away
There are some documents you can toss, and as a rule, once a document has been replaced by a newer version, it’s safe to dispose of the older copy.
There’s also no need to hang onto credit card receipts once you’ve reconciled them against your bank statements, unless they’re needed for warranties.
Credit card and bank statements should be retained for a year, while other household paperwork, such as utility bills, can be thrown away once paid, unless you need a copy for rental applications or you want to keep them to compare your usage over time.
The exception to these rules is if the documents are required for tax purposes.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
