Everyone's moving toward a paperless society. The digital revolution is undoubtedly friendlier for trees, electronic files are much easier to find and back up, and everyone saves on printing and mailing costs. However, there's always some paperwork you can't help getting in dead tree form. And some dinosaurs -- like me -- occasionally work best with paper. Here's how I've found a happy compromise for my physical and electronic filing needs, and perhaps how you might too.My strategy is twofold:
- Keep a digital and paper version of critical documents that are either, a) hard to replace and related to something of significant value (family health records, for example, or major home improvements), or b) tax-related or business-related.
- Knowing that I can't horde every piece of paper, everything else gets scanned or opted for electronic version.
When Keeping Both Paper and Digital Copies Is Smart (and Necessary)
For important, permanent documents, like your tax assessments and birth certificate, there's no question about preserving it in its original form. As mentioned when we discussed setting up an in-case-of-emergency everything document, some essential, hard-to-replace documents should be kept in a secure location like a safe or safe deposit box.
Paper originals you should always keep:
- Birth certificate
- Marriage certificate
- Death certificate
- Wills, trusts and other estate documents
- Car purchase and registration
- Business name registration and GST
- Life insurance policies
For added peace of mind, however, scan these important documents for a digital backup and encrypt those files. The TrueCrypt plus Dropbox combination gives you an encrypted online backup, but if you don't want to store your files in the cloud, just use TrueCrypt on the folder with your sensitive files.
But I also like to have a paper copy and at least one digital copy for other important documents like life insurance policies, tax returns (which should be kept for at least five years), and even some credit card statements. Digital purists (or just people short on space) might prefer scanning everything and tossing the paper to reduce clutter, but too many experiences with failed backups -- on floppies, Zip drives, CDs, DVDs, hard drives, dead NASes and the cloud -- have made me feel more comfortable with a paper backup in addition to the digital version. (Plus, having paper lets me step away from the computer sometimes and deal with paperwork wherever I want.)
Recommendation: Keep a paper version of these and also scan them to digital files
- Tax returns
- Receipts for major purchases (e.g. appliances, furniture, electronics, jewellery). Attach the physical receipts to the warranty cards
- Major home repair/improvement records
- Major medical records (e.g. immunisation records)
- Business licences and other business accounts info
- Car purchase/registration and major repair records
- Education records
- Pet records
- Employment records like performance evaluations
- Copies of important work projects, volunteer records, other personal records
For ease of retrieval and organisation, I recommend using the same names for both your physical and digital folders.
Paperwork You Only Need to Store Temporarily
That sounds like a lot of paper clutter and scanning, sure, but the documents above are ones I think are worth retaining in both formats.
Some important papers, however, just aren't worth the effort to scan because they get replaced rather quickly or have a limited shelf life, so to speak:
Find a temporary place for these paper files you don't need to digitise
- Annual car, home, etc, insurance policy statements: Toss the last one after renewal.
- Payslips: Keep until you get your payment summary at the end of the financial year (unless you're considering getting a home loan, when you want to make sure you have at least three recent pay slips). Of course, this is presuming you still get paper payslips.
Because these are temporary files, an easy way to handle them is to use an accordion file and put them in by month. That way you can easily pull out paperwork from 12 months ago -- grab the last month -- to toss or shred.
Tax-Related and Bank/Credit Card Statements
As much as I'd like a paperless, clutter-less office -- and as easy the ScanSnap, one of those tools we really like, makes digitising the job -- some other less permanent documents can be difficult to go digital with, depending on your circumstances.
One such dead-tree type is tax-related receipts. Some people opt to have all their receipts in digital form (scanned in or saved from online purchases); I confess I print those out -- at least the tax-related ones. The reason is I like to spread out my receipts when working on my taxes and organise them by category in a multi-pocket folder by category (medical receipts, job expenses, etc). If you don't itemise your deductions or you're fine with viewing your receipts as pixels, keeping paper receipts for this purpose won't apply to you. It's also not a legal requirement, by the way.
The other is credit card bills and bank statements. Most of my statements and bills (e.g. investment account statements and utility bills) I get electronically, but I still do get a few paper bank and credit card statements -- the ones associated with business and tax-related purchases. Paper statements are a stronger reminder in the mail to check the statements for errors than electronic ones (emails tend to get buried), and I can attach receipts to the statements or highlight important line items in an old-fashioned manner (I told you I was old school). I store these paper statements in an accordion file by month. At the end of the year, I just close it up and label it with the year so I can save for the recommended seven years, which appeals to the lazy person in me as well.
However, if you're good with checking your credit card statements when you get the email notification, there are certainly advantages to getting the electronic copy instead.
In the end, the struggle between paper versus digital filing may depend on how tactile you are and how much effort you're willing to put into either scanning/downloading a document or filing/storing it, as well as whether you need the searchability and redundant copies that digital storage can provide. (Note: If your issue with transitioning completely to digital is more about the effort of scanning everything in rather than enjoying having paper on hand for some things, a service like Shoeboxed, which turns your paper documents into searchable digital (PDF or Excel) files for you, might be great solution.)
Go Digital with Everything Else
Although it sounds like there's a lot of paper, above, to store, there's still tons more to either get in digital format or reduce.
For example, many regularly recurring bills that are automatically paid, like the cable bill, aren't worth saving in either paper or digital format. Opt-in for electronic bills? Sure. You don't even have to save hard disk space for these types of papers. Other examples, of bills and papers you don't need to keep and should get digital, if possible, include: the mobile phone bill, utility bills and insurance bills.
Our previous complete guide to going paperless highlighted other ways to reduce paper clutter, like printing to PDF and opting out of catalogues. You can even get your comics in digital format nowadays.
Finally, when a piece of paper comes across my desk or into my house that's not worth scanning into the computer or creating a file folder for, it's time to deal with or get rid of it. Hey, I may love paper, but I like a clean workspace and filing cabinets I can actually open too.
What about you?