This is without a doubt going to be one of those “preach what I don’t practice” posts, because I’m absolutely horrible at keeping receipts and just record keeping in general. So this post is not only to help you, but it’s to help me get my organizational skills in shape as well. It’s a well-known fact that we’re supposed to hang on to our receipts and other financial information, but for how long, exactly? And what’s the most efficient way to store these receipts?

First, we need to figure out how long to keep all sorts of records for. Feel free to adjust these figures for your own personal circumstances (though I would make sure that you’re keeping the tax and tax-related forms for at least as long as I recommend).

Keep for a month: ATM receipts, bank receipts, general small non-warranty purchases.
Keep for a year: Bank and credit card statements (your bank can print these off for you again if you ever need them), paycheck stubs, bills
Keep for 3 years: Warranty receipts (or longer if the warranty is longer than 3 years)
Keep for 7 years: T4s and other tax-related forms
Keep forever: Your copy of your tax returns, home improvement and home purchase-related records, large purchase receipts

Now that you know how to keep them, the question becomes where? FrugalTrader had a great post a few weeks ago about storing information for tax purposes. Well, expanding on the concept of the filing cabinet, you can keep your records extremely organized with even a relatively simple furniture set. Take for example the following simple drawer set from IKEA:

In the first drawer, you should be keeping your receipts, statements, pay stubs and bills. At the end of the month, shred the receipts (if you don’t choose to keep them longer) and put the rest of the items in an envelope. Separate your warranty receipts as well as any tax related forms in their own separate envelopes Label them, and put everything except the tax forms in the second drawer. Your second drawer should then contain everything you keep for 1 year and everything you keep for three years. The bottom section is where you should keep all of your tax information.

With this method, everything is easy to find and organized. The IKEA cabinet I posted costs $79 (Canadian), but with some frugal searching I’m sure most of us can either find something similar that we already have, or find something at a significantly reduced price which will do the trick just fine. We should all be making this effort in order to be financially responsible people.

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