7 Simple Rules for Functional Files

Save more, spend less, invest wisely—you know the broad strokes of building a nest egg. But the how-to can be elusive. Financial adviser Manisha Thakor offers fresh strategies you can take to the bank.

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  1. Once there's an annual statement, get rid of the weeklies or monthlies, says productivity psychologist and pro organizer Melissa Gratias of Chattanooga (the expert behind the seven ideas here). This applies to paperwork for credit cards, banking, and investments, among other things. And when pay stubs turn into a W-2, shred or trash the pay stubs.

  2. Keep receipts from online shopping in your inbox. Drag them into a folder and store them there. Or use OneReceipt, an app that automatically uploads e-mail receipts to the cloud. You can add paper receipts by snapping a picture.

  3. Connect all your devices with an app called FileThis. Once you link it to your accounts, it automatically downloads and files your statements to its own cloud or to the cloud service of your choice (such as Dropbox, Evernote, or Google Drive). The app also allows you to scan and digitize paper documents from anywhere.

  4. Convert e-mailed financial statements to pdfs. These are easy to file and easy to view on any computer. (E-mailed statements can get wonky when forwarded.) Then you're all set if you need to send them to your accountant at tax time.

  5. Scan or photocopy hard-to-replace documents, like deeds, insurance agreements, and paperwork from major purchases—essentially anything signed or notarized. Store them in a folder labeled in case of emergency (a.k.a. ICE), and include log-ins and passwords to all financial accounts, plus a durable power of attorney. If your ICE materials are paper, keep them in a locked fireproof box.

  6. Hang on to tax returns for seven years, in case you need to make any amendments or you are audited. Save property-sale and home-repair records and property titles for three years after you sell a house.

  7. If you're gun-shy about trashing files, set up a folder called old to function as a digital box of miscellany. Drag in dead financial documents instead of deleting them. That way, you can keep your active files clean while taking comfort in the fact that nothing is gone forever.