The One Hour Project: Go Through Your Important Papers

Many people (myself included, until pretty recently) have a box of “important papers” where they toss things that they know could be vital someday but they often don’t recall what is exactly in there. I used to keep mine in a small safe; my parents keep theirs in a safety deposit box.

Try spending some time to simply go through all of these important papers so that you understand what exactly is there and why it’s there. This serves a lot of purposes.

Why Go Through Your Personal Documents?

1. You may discover things that are out of date that you need to update.

Things like passports often get tossed in these important papers and forgotten about until they’re desperately needed – and then it may be too late to get them updated for when you need them (or else it’s very expensive). I had a friend pull out a passport a day before an international trip only to realize that the passport was out of date – not good.

Another important document that may need updating is a will and/or revocable living trust, documents you should look into and create if you have a significant other or any descendents.

You may find an old life insurance policy that you’ve been paying on but not thinking about for years – do you really need it? Should it be updated? Does it have cash value that should be cashed in?

2. You may discover items that could be better used elsewhere.

For example, when I recently went through some old papers, I discovered a small number of savings bonds that I immediately cashed in and used to help with student loan debt repayment; I also found several vintage baseball cards that have some significant value but that I won’t be cashing in. In short, this one hour not only helped me find some things that I really needed to get done, but it also ended up with me having some additional cash that I didn’t have before.

3. Organizing these papers may make it easier to find things.

I found that taking these essential papers and organizing them was an essential first step in getting all of my financial papers organized, and doing that helped me to get a much clearer picture of my current financial state than I had before. Here’s how to get started with your own filing system if that’s of interest to you.

Going through the “important papers” box might only take an hour, but it might unearth some financial rewards and will definitely produce some additional peace of mind.

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  1. Mark A says:

    I just did this over the labor day weekend, I’m actually asking readers how they get organized on my blog. My wife had a giant “box of important papers” so I wouldn’t call it a one-hour project for us. We set up a system though, so important papers have a place now.

  2. FIRE Finance says:

    This is one of the most important tasks about keeping our finances in order. We usually update our records and order them every quarter. Also, we need to know which stuff we need to keep and what to throw. As Mark says, a system is necessary. Else we might get drowned with boxes of bills, tax filings, etc. We had spent quite some time researching about the storage time of different classes of documents and had prepared a nice chart (http://firefinance.blogspot.com/2007/01/safekeeping-of-records_24.html).
    We hope our experience helps in clearing clutter and keeping finances in shape.
    Cheers,
    FIRE Finance

  3. ClickerTrainer says:

    I find I’m struggling with what defines a paper as important? Passport, birth certificate, SSN card, Will, Living Will (or DNR), instructions as to pets, instructions as to computer records/finances. Got those….am I missing anything? What do you include?

  4. Christine says:

    Hey Trent! I’m going to be writing personal finance stuff (Frugal living, investing, debt (although I don’t know anything about that yet) etc.) for my college’s school newspaper. Any advice?

  5. Ken S. says:

    An hour?!? While I won’t discount the value of going thru important papers for an hour, I’m pretty certain this will just make a small dent in my many piles, files, stacks and such.

  6. plonkee says:

    I find that the more international trips you make, the more likely you are to remember to update your passport as necessary. I guess that something that’s easier to do in Europe though.

    @ClickerTrainer:
    Off the top of my head, the other papers I keep in the same place are my degree and school leaving certificates and my European Health Insurance Card (replaces E111). Its a place for important things that wouldn’t otherwise have a home really.

  7. Margaret says:

    Christine — if there were one thing I really wish I had known AND taken to heart when I was in university, it would have been the profound difference in savings if you start in your 20s versus starting in your 30s or 40s. At some point I saw a chart (I’ve actually seen it several times) that showed if you start investing a set amount of money (say $100) every month at age 18 and stop at age 28 and never invest another cent, you will end up with more money at age 65 than if you start investing the same amount monthly at age 28 and continue until you retire. I would recommend anything about benefits of retiring (if you are in Canada, than info about how RRSPs work; if US, then stuff about your Roth plans and employer matches, etc). A big problem I saw (had) in university was getting into credit card debt, so stuff on using credit responsibly, and a calculation about how long it takes to pay a credit card off at the minimum payment and how that doubles or triples the cost of whatever you have bought. I think the earlier you become aware of these things, the better. It seems like I have known about these things forever, but actually, I probably didn’t start reading about them and thinking about them until my mid 20s.

  8. Mitch says:

    Christine, have you read through the “how to make your blog successful” stuff on this site? That might help even though it’s more of a column. As for topics–how about instructions for fixing frugal-ish healthy-ish food in a dorm-room microwave? (I must say that my 4-cup pyrex measuring cup was really handy for canned soup, jello, and, oh, yeah, measuring. I also ate a lot of plain rice that year.) Or how about reviewing each of the credit card offers that gets hawked on campus as a regular feature? Eventually maybe people will learn how to understand the offers.

  9. Christine says:

    Thanks Margaret and Trent! I’ll be sure to look through those posts you mentioned.

  10. Mom says:

    My legal papers and other papers I need to save are in a Rubbermaid black box which lets you hang folders in there. It was about $5. It is a very simple collection!The other important papers that I have are letters and photographs!! I have finally figured that I will put the zillions of photographs into boxes by decades. The letters are grouped by who sent them. My mother’s letters to me fill up a Rubbermaid big box you can see through. The photographs are in similar boxes, stacked in my closet. One day, my children can have a bonfire if the want to, but I am unable to throw away 67 years of family letters. They are a hoot!

  11. Lorna says:

    Have you heard of the Emergency Financial First Aid Kit (EEFAK) packet http://www.operationhope.org/effak/
    We just covered this information at work and it is very much in line with your blog.

  12. Jo says:

    Not to mention the psychologic effect of having all important papers checked – it’s a good base to start new things out of sorted old ones.

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