The strange thing about payment stubs is that they seemed to build up faster in your draw than the actual money that comes with them. From time to time that leaves you wondering what you should do with them. Should you dispose of them or do you need to keep them?
What about other financial documents? Which ones are important and need to be kept? Knowing the answers to these questions will give you peace of mind as you de-clutter but also protect you from making any costly mistakes. You will find clear answers to these questions and a few more in this article.
Should You Be Saving Payment Stubs?
The answer will depend on whom you’re asking. In some states, employers aren’t required to give their employees pay stubs. In which case, keeping them or not, is a redundant question; of course, some people choose to use their own paycheck stub template.
The thing to keep in mind is to understand what’s the purpose of the pay stub. It’s to keep you informed of your income and tax obligations etc, as you progress through the financial year. Should there be an irregularity or a query, it would be helpful to have those pay stubs on hand to help you work out the problem or verify that your employer has done so correctly.
After you move into a new tax year, the information on those pay stubs begins to become redundant. So in short, you’re wise to keep your pay stubs for about a year after which you can destroy them. Keep the last pay stub of the financial year as a reference for the new financial year.
Don’t Throw These Away
There are many financial documents that you’re wise to keep in a safe place indefinitely. These include your tax returns, mortgage completion records, any other loan completion statements showing a zero balance. Besides these important financial documents, there are others that you should keep for a significant period of time but not forever.
You will need to keep your tax return documents, such as 1099s, etc for about 7 years. Another guiding principle is to think about anything that may relate to an insurance claim. So that would include insurance policies, even though they may have expired, also receipts for expensive purchases that may benefit from an insurance claim in the future.
One Last Principle
In this article, you’ve read about saving payment stubs and other important financial documents. The key is to keep in mind the purpose of these documents and their intended lifespan. With the move to modern electronic systems and a printable payment stub, it can save a lot of unnecessary paperwork.
Remember, if you’re receiving a particular financial document frequently, as in every month then its intended lifespan will not be forever.
You can check out other great articles on our site that will help you stay informed in a positive way.