Filing everything - I will always have access to that document which I need. Right or wrong?

It really depends what type of person you are. I am the inveterate hoarder and up till now I have filed everything. If you are not the inveterate hoarder as my wife is not then you may go to the other extreme and file almost nothing which in itself can be dangerous.

Filing itself is a time consuming exercise unless, and sometimes even if you are organized. A friend of mine runs his home office with a large cardboard box, one per year. Whenever he gets any paper he wishes to keep he simply throws it into the box. I once asked him how he finds things which he needs and he said that he does end up going through the whole box sometimes which obviously takes a lot of time and more importantly can lead to higher stress levels. Ever noticed how when you can't find something your stress levels start to go up?

Filing nothing is the other variation on this theme and the obvious problem is that you will need the piece of paper that you have thrown away quite often. The difficulty with this is getting a duplicate. Many Institutions like Banks will charge you for getting a duplicate for you. More importantly it will take time, and usually when we have need for something it is like yesterday so again our stress levels will go up.

What approach should we take?

To determine what we should do does take a one time exercise, followed by a change of mind set on how we operate going forward. A little bit of analysis will produce an approach which suits your situation. It goes something like this:

1. Decide the absolutely essential documents, which you cannot get in electronic form. This may be the contract for your house purchase. It may be your marriage certificate, or the last utility bill (notice the last one). It should not be those credit card bills if you can see them on line. This applies to bank statements as well. I used to get all of these but now I get none because I do it all on line. I don't need to file these.
2. Set up a filing systems for only those documents- no more. Don't set up a miscellaneous file because it will grow and take over. Don't set up a receipts file - set up a receipts I must keep file, it will usually be 90% less in size than if you keep them all.
3. File as you go. This is mandatory and will take a mind set change. It is so easy to stick that rates bill on a pile and say that you will get to it. Reason - when you are next looking for some paper it will most probably be the recent one. But they are in a pile aren't they? So off we go again stress levels rising.
4. Clean out your files regularly. What do I mean by regulalry? I mean at least every year, better every six months. If you don't do this then the files become unmanageable and put you off filing. This leads to pile files again which is a real backward step.
5. Do this one time exercise now before it is too late. The more you do not have a real system of minimal filing the worse the problem becomes. Most imortantly it is time wasting and you don't want to waste your precious time do you?
6. Finally - stick at the system. Don't create more and more files, only those which you really have to and where you cannot get the information electronically as we said at the beginning.

I did this exercise two weeks ago and wait for it - got rid of two very large packing size boxes of paper I had filed and didn't need. Imagine how much time I had wasted over the period filing those!