What financial records do I need to keep?

MBA Financial StrategistsLatest ArticlesWhat financial records do I need to keep?

What financial records do I need to keep?

Life can be complicated enough without all the administrative paperwork that often accompanies it. This is particularly true when it comes to your personal finances.

If stacks of old bank statements, utility bills, receipts, insurance and superannuation documents mean you can’t see the trees for the paper,de-clutter, simplify your finances and improve your quality of life today.

Why simplify?

There are many good reasons to pare back on your financial record-keeping, including:

  • Living in smaller dwellings means we have less space to store documents

  • Saves time by making it easier to find what you need

  • Helps your loved ones find relevant documents easily should something happen to you

  • In the event of a home emergency, you can quickly find important documents you may want to take

  • Makes your life easier at tax time.

What you need to keep

When it comes to identifying the documents you need to keep, considering your legal obligations is a good place to start.

Thefirst of these is your annual tax return. In order to complete your tax return you’ll need documentary evidence of:

  • all payments you’ve received, such as wages, interest, dividends and rental income

  • any expenses related to income received, such as work-related expenses or rental repairs

  • the sale or purchase of assets, such as property or shares

  • donations, contributions or gifts to charities

  • private health insurance cover

  • medical expenses, both your own and those of any dependents.1

You need to keep these documents for five years after you lodge your tax return in case you’re asked to substantiate your claims2, and it’s also a good idea to keep your notice of tax assessments for five years. However, if you run a small business, the document requirements and timeframes differ3 – find out more at the Australian Tax Office (ATO).

The second category of documents are those related to property such as:

  • property deeds

  • home loan documents

  • renovation approvals

  • warranties relating to work undertaken.

Other documents to keep include4:

  • wills

  • tax file numbers

  • powers of attorney

  • birth certificates

  • death certificates

  • marriage certificates

  • immunisation records

  • passports

  • current insurance policies, such as your life, home and contents, and motor insurance

  • your most recent superannuation statement

  • any personal loan documents

  • vehicle registration

  • vehicle service history

  • business registrations

  • qualifications documents.

What you can throw away

There are some documents you can toss, and as a rule, once a document has been replaced by a newer version, it’s safe to dispose of the older copy.

There’s also no need to hang onto credit card receipts once you’ve reconciled them against your bank statements, unless they’re needed for warranties.

Credit card and bank statements should be retained for a year, while other household paperwork, such as utility bills, can be thrown away once paid, unless you need a copy for rental applications or you want to keep them to compare your usage over time.

The exception to these rules is if the documents are required for tax purposes.