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When you receive financial documents, what do you typically do? Some collect everything in an ever-growing pile of paperwork while others may elect to toss them in the trash or send them through the shredder.

However, neither is ideal as there are some important financial documents you should hold onto in a safe and secure place. Keep reading to find out more about what documents you should keep and for how long.

1. Pay Stubs

It's safe to say that the majority of people are paid every two weeks. That means that throughout the year, you're likely to accumulate a lot of pay stubs. If the money hits your account, do you really need to keep your pay stubs? The answer is yes, for at least a year. Keep your pay stub records for the calendar year and make sure that it syncs with what's on your W-2. If everything lines up, you can shred your pay stubs after a year.

Alternatively, you might be able to opt for electronic delivery through your work. That way your pay stubs will be stored securely by your company and will be easily accessible when you need them.

2. Bank Statements

You should keep your monthly bank statements for at least a year as well. Bank statements are a good way to prove your income for things like applying for a new apartment. It's also good to have for tax time, just in case you need to comb through your records.

3. Credit Card Statements

Keep your credit card statements for one month or until the next one arrives, this can be helpful in case you need to go back through and make sure everything is correct. If there are no errors and everything looks good, you can shred it when your next statement arrives.

4. Utility Bills

You might have various utility bills throughout the month. You can stash those away for at least one month until the next statement arrives. Again, make sure that everything looks good and there are no mistakes. When your next statement comes in, you can shred your old utility bills.

5. Receipts

Do you really need to keep receipts? Some crumple receipts up and toss them in the trash. But if you want to be especially diligent, it can be a good idea to keep them for a month. This way you can match them to your credit or debit card transactions and ensure everything is correct. If you're making a big purchase or purchasing something you might need to return, keep the receipt indefinitely.

6. Tax Return

Tax time can produce a lot of paperwork. While you might want to be done with all of that paperwork once you've filed, you'll want to keep your tax returns and all relevant paperwork for seven years. The IRS typically uses a window of three years for any audits, so having your previous paperwork is a must.

7. Confirmations

When I paid off my student loans, I got several documents that stated that my loans were paid off in full. I plan to keep these records indefinitely so there's no doubt about all of my loans being paid off. If you get a confirmation about any debt paid in full, consider following my lead and keeping them. You should also keep all documents related to purchasing your house.

Bottom Line

It's inevitable that you'll get important financial documents throughout the year. Some are more important than others, but you don't need to keep all of them forever. Use this guide, and a combination of electronic records, to keep only what you need and cut down the clutter.

Once you've paired down what you need, have organized folders for everything that you plan on keeping and shred anything you don't that has confidential information. That way, you'll be all set and know where things are if and when you need it.

Disclosures

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on www.Key.com, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

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