Decluttering can lower stress levels and deliver a sense of calm to you and your workspace

If you hang on to every receipt and piece of junk mail sent your way for fear you may need it later, consider this your wakeup call. It’s absolutely not necessary to keep all of your financial documents forever. In fact, clearing out the clutter created by stacks of paperwork will likely make you feel better and work smarter.

Research published in the Journal of Neuroscience found that people were more productive and less irritable when their workspace was free of clutter. The reason? An over-stimulated brain creates the stress hormone cortisol, which is great if you need to swim away from a shark, but not at all helpful for conducting business or plowing through the bills in your home office.

Here’s a guide on what financial paperwork to keep – and for how long – and what to throw away:

Toss these items today

Most junk mail can go straight to the dumpster or recycling bin after being shredded. This includes solicitations for credit cards, home, life, and auto insurance plans, etc.

Keep for a month (or after reconciling bills and other financial statements)

It’s a good idea to hang on to ATM receipts and other receipts as long as you don’t have plans to return the item, or need the receipt for a rebate or warranty, for a month or two. Exceptions would be for big-ticket items such as electronics, appliances, computers, and anything you want to deduct from your taxes, including business meals and equipment used to do your job if you are self-employed.

Toss after a year (and after your taxes have been filed)

There are some things that need to be kept in your files for a year, or at least until end-of-year consolidation statements arrive in your email or through the mail. These include: Cell phone, cable, telephone, internet and other streaming service statements (unless you’re deducting them for work or home office-related expenses); brokerage statements; credit card bills; pay stubs; Social Security statements; utility bills, and statements from financial institutions.

Throw away after seven years

Think about this list as the items you should keep in files inside a cabinet for safekeeping for seven years or when you won’t need them any longer for tax purposes: Child-care records; flexible-spending account documentation; 401(k) and other retirement plan year-end statements; IRA contributions; purchase records for investments; records of charitable donations; records on houses you’ve sold; tax returns along with the documentation used to prepare them; correspondence from the IRS.

Keep these for as long as you own the asset

It’s important to keep some paperwork for as long as you own the item or property. These include: Titles; warranties; insurance policies; receipts for important purchases such as art, technology, antiques, jewelry; receipts for home renovations or investments made to your home or other property.

Keep these items forever

The documents you need to hold on to for your lifetime should be stored in a fire-proof safe or safe-deposit box, with a second copy in another safe place that’s not inside your home or home office. These include: Adoption papers; appraisals; birth certificates; citizenship documents; custody agreements; deeds; divorce or annulment papers; financial aid documents; a list of credit card numbers, bank and brokerage statements, insurance policies, passwords and contact information, including email and phone numbers; list of important contacts, including your lawyer, accountant, physician and relatives; military records; powers of attorney; stock certificates; wills and living wills.

A word on safely tossing out documents

For anything that might contain your personal information, use a shredder. A good crosscut shredder can be purchased for less than $100 and using one will make it nearly impossible for thieves to steal your information. That’s a small price to pay for peace of mind.


This article by Jean Chatzky (reporting by Casandra Andrews) originally appeared on SavvyMoney blog, and is used by permission.

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