Thank goodness for electronic billing, bill-pay and account access. The digital world can help you save time, be more organized and cut down significantly on paper… Significantly — but not completely.
No matter how much of your financial life you have online, you still need to save some paper documents. (Okay, maybe you don’t need the actual paper if you scan it all in and back up what you need to save.)
Here’s how to not suck at tossing paperwork.

To hold for a year or less (with some buts):

Monthly utility/cable/phone bills: Once you know the bill is correct, toss it. But if you deduct some of these costs on your tax return, you’ll want to save them with your return (more on that in a moment).
Credit card statements: If you know all the charges are correct, you probably don’t need to keep this. But if you make a big purchase and your lender offers some product protections, consider holding onto that month’s bill. Also, if there’s a deductible purchase on the statement, hold that for your tax return.
Medical bills: Once you know your claim has been paid by your health insurance company, you probably don’t need to save these. But if you’re potentially deducting medical expenses on your tax return, hang on to the bills.
Monthly/quarterly account statements: Hold on to statements from your investment and retirement accounts until you receive the year-end one, which summarizes the previous 12 months. Once you know it’s right, there’s no need to hold on to the monthlies anymore.
Bank statements: Once you know your monthly statement is correct, you can toss the statement at the end of the year. But if you’ve used a check to pay for a large or deductible purchase, hold on to it.
Pay stubs: If you still actually get these, you can toss them after you reconcile them with your W-2 at the end of the year. But if you’re planning to apply for a mortgage, your lender may want to see a few month’s worth.

To hold for longer

Tax Returns: You don’t want to be missing tax-related documents if Uncle Sam has questions about your tax returns. Hold the returns and supporting documents for at least seven years. The IRS can randomly audit you three years after you file — or six years afterward if it thinks you skipped out on reporting your income by at least 25%.
Year-end account statements: These will show the cost basis for your investments, so you want to hold on to them for as long as you have the investment. (And then a bit longer to support your tax return.)
Retirement plan statements: Hold on to your annual statements as long as you have assets in the accounts. This will help ensure your eventual withdrawals are taxed the right way. This is especially important to show if you’ve saved pre-tax or after-tax dollars to your 401(k), and to show your savings to both traditional and Roth options. For your IRAs, be sure to save Form 8606 — the document that shows if your contributions were deductible or nondeductible.
Home-related documents: Keep your purchase documents, and also all home improvement records, which can be used to calculate your cost basis when you sell your home, potentially saving you a bundle in taxes. If you’ve done work that needed a permit or town inspection, hold on to these, too, for as long as you own your home.
Insurance Policies: Hold onto to your policies for home/renters insurance, car insurance and umbrella insurance for the year. When you get a renewal, toss the old one. Keep your life, disability or long-term care policies as long as they’re in force.

To hold indefinitely

Loan paperwork: As long as you’re still paying a loan (car, mortgage, student loan — the works), keep all your docs and contracts. When you pay off the loan, the lender will give you a payoff statement. Keep this forever, just in case some zombie debt comes back to haunt you.
The important stuff: While you can replace the following documents, it will be a major headache. Invest in a firebox or a safety-deposit box for:

  • Birth certificates
  • Adoption records
  • Death certificates
  • Marriage and divorce papers
  • Military records
  • Wills, powers of attorney and health care proxies
  • Social Security cards
  • Passports
  • Appraisals for jewelry, art or other valuable property (unless you sell the item)
  • A videotape of your home’s contents to help with insurance claims in the event of a home fire. Update this once a year.

A few thoughts on e-documents

If you prefer digital to paper, you can download account statements and keep the electronic versions, but make sure they have a place to live that’s beyond your hard drive.
If your computer ever gives you the dreaded blue screen of death, you need to be sure you still have access to your documents.
But, you say, you can access back statements through your online accounts. That may be true, but do you really want to have to track that all down? And not all online accounts will offer back statements in perpetuity, so it’s better to be safe than sorry.
Instead, to make sure you have what you need, invest in an external hard drive that you back up regularly.
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You can read Karin Price Mueller’s stories for The Star-Ledger at, follow her on Facebook, and on Twitter @kpmueller.
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Editor's Note: This article originally appeared on Consumerist.