Your finance always comes with records. But, have you ever wondered how long you should keep these records? Which records are considered unnecessary clutter? Which are the most important records in case errors occur because of other people? Which records do you need to shred and which ones do you need to save?

Read this quick guide that teaches you how long you should keep different financial records.

Keep These Financial Records Forever or Permanently

There are some financial documents you have to keep for good if ever they get needed. These documents are important and there could be different reasons why you might them. Some of these might be rarely needed but you still need to keep them forever.

• Birth certificates or adoption paperwork
• Marriage certificates
• Death certificates
• Wills
• IRA contribution statements for the nondeductible contributions proving that your taxes are paid
• Records of the paid-off mortgages on land, housing, and other properties

Keep These Financial Records for Active Things

If you have existing active loans, contracts, and other financial contributions or obligations, it is best to keep these records indefinitely. These include the following:

• Contracts
• Insurance documents
• Stock or equity records
• Retirement plan contributions
• Home improvement records
• Brokerage statements
• Ongoing debt repayments
• Property tax records
• Records for items that haven’t exceeded return dates
• Records for items related to active warranties

Keep These Financial Records for a Minimum of 3 Years

Some documents can be kept for a shorter period of time but it is still important to keep them. It is important to keep most of these documents for 3 years to give proof of resolve, payment, or prior claims service:

• Property sales records
• Canceled insurance policies
• Documentations required for capital gains tax or as support for tax returns deductions
• Paid medical bills

Where to Keep Financial Records

The safest and most secure way is scanning and encrypting your records that can be stored locally on the hard drive with encrypted cloud backup.

If you love the idea of having digital records with no need to set up and deal with technology yourself, there are now banks offering virtual safety deposit banks. With these, you can upload your documents securely, most of which are free provided that they are within a specific storage size.

If you don’t like the thought of digital copies, you can always use a locked safe to keep your paper copies secure. The safe must be waterproof and fireproof. You can also store them in the safety deposit box that you can leave in the vault at your chosen bank.

Just remember to avoid placing a living will or other documents required within short time frames or during emergencies in the safety deposit box. These include documents that contain a person’s funeral wishes. It is because getting access to them is limited to banking hours. Also, these documents can only be accessed by authorized individuals.