How to Set Up an Effective Household Filing System

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A reader recently requested that I explain how I set up my household file box, and which filing categories I use. A Facebook inquiry revealed that this is an area where many people struggle. I used to have a problem with this too, until I finally found a simple system that works for me.

My household filing system is a plastic, portable, hanging file box with a lid. I purchased it at Wal-Mart, but you can also find them at office supply stores, like Staples.

I use 3 different colors of hanging folders, because we used to own rental property, and are still receiving payments for a property sold on contract. We also operate a business out of our home. My files are sorted by color, and arranged alphabetically within each color.

Green-Household
Red-Rentals
Blue-Business

These are my file categories (I won’t explain my rental or business categories, because these won’t be of interest to most readers). I use labeled manila folders to create subcategories within each general file category.

BANK – I use a subcategory folder for each account

BILLS – Within this hanging file, I have 4 manila folders, each labeled with one week of the month – 1st-7th, 8th-14th, etc. When I receive bills, I file them according to their due date.

CHIROPRACTIC

DENTAL

DISCOVER CARD – I use a manila folder inside each credit card file, to hold receipts

HOME REPAIRS AND IMPROVEMENTS

INSURANCE
-AUTO
-HEALTH
-HOMEOWNERS
-LIFE

KIDS (this is for bulky stuff that doesn’t fit in their HMG sections)
-BEE
-CAKES
-DJ

MEDICAL
-EOBS
-PRESCRIPTION RECEIPTS
-PAID INVOICES

MEMBERSHIPS – This is for paperwork from organizations we belong to. Some examples are:
-LIBRARIES
-AAA
-CONSIGNMENT STORE ACCOUNTS

PROCEEDINGS (This is stuff I’m currently dealing with)
-ACTIVE
-RESOLVED

PUMPKIN

TAXES
-INCOME
-PROPERTY

UTILITIES
-PHONE/INTERNET
-ELECTRIC
-HEATING FUEL
-SATELLITE
-TRASH/RECYCLING

VEHICLES – I keep car maintenance and repair records here.
-VAN
-CAR

VISA CARD

(NOTE: We keep bank and investment statements in 3-ring binders, organized by month. These were provided by our financial institutions).

This basic system works well for the handling of weekly household paperwork. We keep paperwork that is seldom needed or referred to in our long-term filing cabinet in the basement. We have the following files:

INVESTMENTS (we keep the annual reports and prospectuses here)
OWNER’S MANUALS
RECEIPTS/WARRANTIES
TAX RETURNS
WILL (copy)

We keep abstracts, deeds, titles, birth/marriage certificates, paid promissory notes, savings bonds, etc. in our fireproof safe. We rarely need these documents, and we want to protect them from damage, because they’re difficult and expensive to replace.

At year-end, we put all of our paperwork in a banker’s box, label it, and put it in long-term storage in our back shed. We keep these boxes for seven years, which is the statute of limitations for IRS audit. After seven years, the contents get shredded and recycled.

Here are some tips for setting up an effective filing system:

1. Print the titles of your tabs and labels with large, bold letters. I like to use a labelmaker for this.

2. On subcategory file labels, indicate the hanging file titles in which they belong. Here’s an example:

File title: INSURANCE

Subcategory titles:

Ins: AUTO
Ins: HEALTH
Ins: HOME
Ins: LIFE

3. When choosing file titles, use the words you most commonly associate with the documents. For example, “DEED” instead of “WARRANTY DEED.” This will make it easier for you to find things.

4. If you find that your subcategory folders are making your hanging files too bulky, considering having more than one hanging file per category. For example:

UTILITIES (1 of 2)
-PHONE/INTERNET
-ELECTRIC
-HEATING FUEL

UTILITIES (2 of 2)
-SATELLITE
-TRASH/RECYCLING

5.  Arrange files alphabetically

6. Clip related papers together, to keep your files neat and orderly. I prefer binder clips for this, because paper clips slip off, and catch on other papers.

7. Don’t use general categories like MISCELLANEOUS or INFORMATION. All papers could potentially fit into these categories, and they’ll become catch-alls for stuff you don’t want to deal with. This won’t help you get and stay organized.

8. If you operate a home business, consider using different colored folders for your business files. Arrange your files so that the folders of each color are together and alphabetized. We have a home business and an installment sale contract, so I use three different colors.

9. Keep it simple. If you get too detailed and make gazillions of files, your system will become tedious and complicated, and you won’t enjoy using it!

Before you begin filing, I highly recommend that you read this article, “Your Important Papers: What to Keep and Where.” This is a very useful reference that I keep in my HMG and refer to often.

Now gather all of your papers. Go through the entire house and find every scrap. Start at the top of the pile, and handle each paper only once. Don’t set anything aside to deal with later, and use your recycling bin liberally! Remember that only 15% of filed paper is ever referred to again.

IMPORTANT! To prevent identity theft, make sure to shred any papers with personal information in a cross-cut shredder before you recycle them. This includes names, addresses, account numbers, social security numbers, and birth dates. Don’t take chances–90% of identity theft is caused by consumers being careless with their own information.

Good luck! I hope this article helps you tackle that paper pile, once and for all :)

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Heather is a minimalist in love with a recovering packrat. 7 years ago, she and her husband sold pretty much anything that wasn't nailed down in order to pay off their mortgage, and they've been living happily debt-free ever since. They have 3 hilarious little kids who were conceived with the help of in vitro fertilization, and they haven't had a good night's sleep in the last decade. Heather is an anglophile who loves all things British, and spends her free time looking at real estate listings in Cornwall. Every day, she and her family work toward a simpler, more meaningful life. Some days are awesome, some are disastrous, and you can read about all of them here.

Have a question? Need a listening ear? Contact Heather, or visit Want What You Have on Facebook.

© Heather at Want What You Have, 2008-2014. Unauthorized use and/or duplication of material, including photos, without express and written permission from this blog’s author and owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Heather at Want What You Have, with appropriate and specific direction to the original content. Derivative works are not permitted.

7 comments… add one

  1. Julie May 1, 2012, 2:36 am

    Do you have to purchase a particular style of hanging file folders,so that the label on the file category (e.g. INSURANCE) will stand above the subcategory file lables (e.g. homeowner’s, auto, camper) on the manilla folders?

    Reply
    1. abby March 9, 2013, 9:30 pm

      no i am pretty sure you don’t.

      Reply
  2. Texas Blu Topaz May 26, 2013, 4:56 pm

    This is a great article, Heather. Totally going to use your ideas here. Paper and what to do with it is my worst nightmare! We began remodeling our home a couple years ago and I got so unorganized during that time that it’s just been paralyzing to me! I can’t wait to get started again with my organization using your method. It makes me crazy when I can’t find things, and that’s been happening a lot over the last year or so. One thing I find very useful that I do at work is to create a “file structure” document. This is basically a document that would tell anyone “where to look/where to put it and it looks something like the example I’ll post below. I just put it in the very front of the draw/box (or top drawer of the file cabinet) it pertains to in a hanging file, dedicated to this document alone.

    File Structure (document)

    Insurance
    Car
    Home
    Health
    Life
    Loans
    Car(s)
    Land
    House
    Utilities
    Cell (Yes, I put cell phones w/ utilities)
    Elec
    Gas
    Internet
    TV (including Netflix, cable/satellite provider, etc…)
    Water
    Vehicles
    Boat
    Car #1 (or make/model of car: Chev Highlander)
    Car #2
    Car #3
    Motorcycle
    Warrantys
    Car(s)
    DVD player (example)
    Motorcyle
    TV etc…. etc….
    (I don’t get fancy with titles. I use the same terms would use in day to day conversation.)

    I, also, set up an electronic file system that looks just like my paper one on my computer as well as an electronic “file structure” document for all the electronic files I download – bank, utility, medical, investment statements, and so on. More and more things are going to electronic files and I back them up on a couple different storage devices monthly. I print anything I know I’ll have trouble relocating online or that I may not have access to over a long period of time.

    Any thoughts on what you do about the initial “where to look/where to put it” information? I’m thinking about my husband and grown children if something should happen to me and they need to find things for themselves.

    Thanks for the things you do for your Readers!

    Reply
  3. Texas Blu Topaz May 26, 2013, 5:02 pm

    Well, the post didn’t come out as I intended it to. The main categories I used in my example are: Insurance, Loans, Utilities, Vehicles & Warrantys with sub-catgories listed under each category.

    Reply
  4. Mallorie April 11, 2014, 8:22 pm

    Hi Heather, thanks for this great how-to post! I am setting up my home filing system right now, and I have a question: Why is there a “MEDICAL” file separate from the “INSURANCE” file’s subcategory file “HEALTH”? What are some common documents that you recommend being filed under one instead of the other?

    Thanks so much for your help! My husband bought me a real wood filing cabinet (sweet!) and after almost 8 years of marriage, I am tossing out our old “filing system” (a very worn accordion folder!)

    Reply
    1. Heather April 11, 2014, 8:52 pm

      Mallorie, the INSURANCE file is only for insurance policies and related documentation, so the health subcategory is where I keep our health insurance plan booklet and invoices. The MEDICAL file is where I file EOBS, invoices from doctor’s offices, prescription receipts, etc. I hope this helps!

      Enjoy your new filing cabinet! WOO HOO!

      Reply
      1. Mallorie April 11, 2014, 11:42 pm

        Thanks for clarifying Heather! I am such a geek about getting organized- having so much fun!

        Reply

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