Paperless Filing Tools
Paperless doesn't mean recordless, but keeping electronic files is a lot different from filing paper. Most every financial record viewed online or in an e-mail can be saved to a folder on your computer. Many bank and investment Web sites make it clear with icons on pages you're viewing that you can print the record or e-mail it, but it isn't always clear that the print option isn't for paper only. Using the "save as" function allows you to choose the file type when you're saving it to your computer. Saving as a PDF or PNG file, for instance, creates a viewable file of a financial record, statement or single transaction.
Banks do a commendable job of providing instructions for banking online, but they don't give much information on what to do with your files and records once you take save them from the bank's Web site. Financial management software and online budget tools have file systems in place for pulling records from companies you do business with, and they make it simple to store by month, type of expense or budget. QuickBooks and Mint.com are two of the most well-known services for helping you manage files and finances. If you want to do it on your own, however, you are really on your own.
Setting up folders on you computer by month, quarter and year is one way to start, but keeping those folders up-to-date and complete depends on how well you utilize what banks do offer. Sign up for e-mail notices or set your calendar to review transactions on a regular basis, keeping an eye on expenses, fees and any overcharges. Pay attention to statement notices and go over the actual statements you receive. Simply moving the file to a folder without reviewing it is a little too easy. Online banking and storage saves time, but it shouldn't replace the time you spend tracking and reconciling your budget.
Files online should be kept just as long as paper files, about seven years seems to be a general recommendation, and keeping the files doesn't have to mean keeping them on a hard drive. Using portable storage devices to move folders is simple and gives you the opportunity to back up information in a secondary place. Password-protecting all of the data and making a plan for giving others -- family, friends or trusted advisers -- access in case of an emergency also adds peace of mind. Often, files are small enough to just keep them on your computer, but remember to back them up regularly. Banks do allow access going back months or even years, but having ready access to files you need -- when you need them -- may be easiest when they're on your own system.
And avoid the temptation to print all of these files. Even the IRS accepts electronic files, so keep the paperless banking paperless, but don't worry about being recordless. It's all there in print, just not on paper.