Shred it or save it?

Shredding documents is no longer a matter of efficient trash removal; it's a vital security strategy for every person. Shredding sensitive papers is a powerful shield against identity theft.

But gleefully reducing all of your old files into confetti isn't so smart. While certain documents can be spaghetti-ed immediately (think: credit card and utility bills), others have more extended "shred by" dates—bank statements, for example, should be kept for one year unless needed for tax filing, while you should hold onto tax records for seven years. Receipts for large purchases and service contracts should be saved until you sell or discard the item.

Which raises another riddle: How do you keep track of what to shred and what to save?

While shredding can help protect you from identity theft, it's also a useful way to get rid of excess paper. Read "Spring-Clean Your Finances."

Thankfully, a handy infographic from the Federal Trade Commission provides a color-coordinated list that simplifies the issue. Printed in a size that can be conveniently taped to your shredder, it lists what can get tossed in the machine's maw immediately; what should be saved for a year; what you can shred after seven years; which documents can be left to your discretion; and which should be locked in a safe place and preserved throughout your life. The full list can be downloaded for free from the FTC's website.

— Catherine Fredman