Your Filing is Finished!
“What do I need to keep and how long should I keep it?”
This is one of the most asked questions we get from clients around their papers.
For years now we’ve been using FreedomFiler® with clients. We love this system because it really teaches clients exactly that – what do you need to keep and for how long?
The beauty of the FreedomFiler® system is that it does the work of making these decisions for you. It is designed to cycle papers OUT of the files – forever eliminating the need to set aside time to “purge the filing cabinet”.
FreedomFiler® is made up of 4 color-coded sections:
- GREEN for monthly miscellaneous transactions
- BLUE for tax-related transactions
- RED for permanent family and property records
- ORANGE/YELLOW for current policies, agreements
- You may set up an optional fifth section in PURPLE, for saving literature, articles, and notes
When filing papers with FreedomFiler®, you only have to figure out what kind of paper you are holding; that determines which color group it gets filed in and the color group will determine how long it’s kept.
To use the system ask 4 simple questions
- Does this paper require immediate action or follow-up?
- Can I use this paper for taxes?
- Is this a vital record belonging to a person or an asset?
- Is this a newer version of an existing document?
Click the graphic below to see how it works:
Could it be that easy? YES!
If you use FreedomFiler® share your experience. If you have a question, share that too!
Notes from the Junk Drawer 
I love a good color coded system! thanks
Thanks for this info. Question: for the recommendation to save monthly documents for 2 years – how did you decide that? Is one year actually enough? What about the 7 years recommended for tax purposes?
The short answers are 1 year can be enough for NON-tax related documents and the IRS requirements for tax documents range from 3-7 years depending on your situation.
The longer answer is based in how the self-purging feature of the system works.
The green monthly section is intended to hold papers that are NOT tax-related, which means they are “nice to keep”, not “have to keep”. It typically holds statements and receipts that you may want for returns, short-term warranties, or just reference. The 2 year rotation allows those papers to be around long enough that if you discovered you did need them for tax purposes they would still be around when you actually did your taxes. If you are certain you won’t need them for taxes you could just use 1 set of green monthly files and rotate in a 1 year cycle. The purpose of the cycling is so you don’t even have to think about when to purge – when you go to use a green file again and something is in it; OK to purge it!
Similarly with the tax archives – the beauty of the 10 year rotation cycle ensures you never have to calculate out when purging is OK. For example, 2013 taxes would be filed into the “Tax Year 3” folder because 2013 ends in a “3”. Ten years later the taxes for year 2023 automatically bump out the 2013 because 2023 is the next year that ends in a “3”.
Hope that helps; tell us if it doesn’t!
I love this color coding idea! I’m going to try color coding my hanging files at work- thanks!
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