I hate clutter, especially when it’s unimportant clutter.  Sure, I’ve kept many things from my childhood and other items that hold sentimental value, but over the years, I’ve even tossed some of that, too.  I had to learn to tell myself that I’m really, truly, absolutely never going to need it and it will probably just sit in the same drawer for another few years, forgotten until I find it again and wonder if I should get rid of it.

The same holds true for more important things like bank statements.  I know I need to hold onto these, but I get itchy after a while—is it time to shred and get rid of them yet?  Maybe you toss yours right away, maybe you adhere to the 7-year rule we’ve all heard, maybe you just decide on your own when the time is right.  Is there a set amount of time that we should keep these records, though?

Keep the Important Records

The situation gets individualized here.  As for cancelled checks that have come with your statements, you only need to hang onto the ones that were for major items (such as your mortgage payment) or necessary for tax purposes (purchases for your business, etc.).  Some websites will say 3 years is okay, others prefer the 7-year rule.

In reality, the IRS can audit you up to 3 years from the date of your tax return, but 6 years is allowed if they suspect you of falsely reporting your income by up to 25%.  For this reason, it is probably best to keep all information related to your tax returns, any annual bank statements you might receive, and copies of important checks for 7 years, just to be on the safe side.  Whatever you do get rid of, be sure to shred it first to avoid any risk of identity theft.

Online Bank Statements

But wait—maybe you’re ahead of the throw-away game and all of your bank statements are now online.  You’ve gone green and kept up with technology.  What if you get audited?  Check with your bank for their specific regulations, but in general, banks will hang onto your statements for 7 years like you would, and you can request a paper copy at any time.  Your important checks are now online images, but that’s okay, too.  They are regarded as acceptable legal documents in the case of an audit.

If you choose to stick with the paper statements, you can keep your records (and clutter) down to the minimum by only hanging onto ones relevant to your home, business, taxes, etc.  If you go paperless, you’ll have even less to worry about.  I’ve gone paperless and de-cluttered my own home; now if I can just convince my parents to throw away those expired coupons and my old school lunch menus…