Between her book and Netflix series, Marie Kondo has launched a sweeping decluttering movement-encouraging consumers to take stock of and organize their belongings, keeping only those things that spark joy.

 

But, during the decluttering process, many Americans will come across important paperwork like financial records that might not spark joy. So how can Marie Kondo's principles apply to these items?

 

Let's be honest-paperwork rarely, if ever, sparks joy. However, consciously decluttering and a sensible system of organization can lead you to a path where joy can be found, especially if a moment arises when you urgently need those documents.

 

With Tax Day behind us, it's a perfect time to think like Marie Kondo with your financial records-and to help you get started, M&T Bank has compiled these helpful tips and guidelines on what to keep and for how long.

 

1. Review your records once a year

We all gather so much stuff. Bank statements, bills, pay stubs, it all piles up. If you don't stay on top of it, it can get out of hand and become difficult to organize-which is anything but joyful. Review your files at least once a year and throw out (or-better yet-shred!) what you no longer need. The weeks following Tax Day are a great time for "Spring Cleaning" your paperwork.

 

2. Documents to keep for the short-term and medium-term

A smart way to approach tidying your paperwork is to separate your files into three categories: short-term, medium-term and permanent retention. Short-term retention usually runs about 2-4 years. Documents that typically fall into this category are common bills and household expenses, such as gas, electric, phone and cable bills. Medium-term documents should be kept for 7-8 years. This category covers documents such as accident reports, expired contracts and leases, bank and brokerage statements, paid-off loans and insurance policies.

 

3. Retaining permanent documents

Permanent records are those that will be critical to sparking-or at least preserving-joy for years and years to come. This often begins with completed tax returns, which you should save forever. That's because if you made an error or omission with your return, the IRS has six years to pursue action; however, if they don't have a record of your filing or if they consider your return to be fraudulent, the six-year statute-of-limitations clock may not start or apply to the situation.

 

Additionally, property purchase documents for your home or any investment properties should be retained forever or until the property is sold. Permanent retention also applies to vital documents, which deserve special attention and protection, such as birth certificates, social security cards, military discharge papers, marriage certificates and estate-planning documents.

 

4. Appropriate destruction contributes to identity protection

Documents with sensitive or personal information, such as account numbers, addresses or Social Security numbers, should be shredded. Identity theft through stolen documents remains a real threat, even as the risk of online data attacks rises ever higher. In 2017, there were 16.7 million victims of identity fraud and $16.8 billion was stolen from victims, according to the Insurance Information Institute.