It is important to de-clutter and simplify your financial records to improve your quality of life.

Why should we simplify?

There are many reasons, such as:

  • Living in smaller places means we have less space to store them
  • It will save time because it will be easier to find what you need
  • It will help your loved ones find the documents they need if something happens to you
  • In the event of an emergency, you can find the important documents you need quickly
  • It will make tax time easier

What should you keep?

When you need to identify the documents that you need to keep, it is important to consider your legal obligations.

1. Documents related to annual tax return – in order to complete your tax return you will need evidence of:

  • All payments you have received such as wages, interest, rental income
  • Any expenses related to income received such as work-related expenses
  • The sale or purchase of assets such as property
  • Any donations, contributions or gifts to charities
  • Private health insurance cover
  • Medical expenses for yourself and any dependents

You will need to keep these documents for five years after you lodge your tax return in case you are asked to verify your claims. It is also recommended that you keep your notice of assessments for five years too. If you run your own business these time frames do differ, so check the ATO website for updated information.

2. Documents related to property, such as:

  • Property deeds
  • Home loan documents
  • Renovation approvals
  • Warranties relating to work undertaken

3. Other documents to keep include:

  • Wills
  • Tax file numbers
  • Powers of attorney
  • Birth certificates
  • Death certificates
  • Marriage certificates
  • Immunisation records
  • Passports
  • Insurance policies such as life, home and contents, motor
  • Most recent superannuation statement
  • Any personal loan documents
  • Vehicle registration
  • Vehicle service history
  • Business registration
  • Qualification documents

What can you throw away?

As a general rule, once a document has been replaced by a newer one, it is safe to dispose of the older one. There is also no need to hang onto credit card receipts once they have been reconciled against your bank statements (unless they are warranties).

Credit card and bank statements should be retained for a year, whilst household paperwork such as utility bills can be thrown away once paid (unless you need a copy for rental applications or you want to compare your usage over time).

Please note, there are exceptions to these rules if documents are required for tax purposes.

Louisa Sanghera is a Finance Broker for Residential Mortgages, Vehicle and Asset Finance, Commercial Lending and Budgeting and Cashflow Coaching with Zippy Financial.

She has more than 30 years in the Banking and Finance Industry, and since founding Zippy Financial, has become a multi award-nominated expert in the field featuring regularly in industry press and speaking at finance and investment seminars across the country.

Phone: 1300 855 022