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Start out by taking ‘baby steps’—don’t try to tackle an entire room, file cabinet or dining room table of papers in one day. Take fifteen minutes a day to start facing your abundance of paper. Once you’re more comfortable with the process, increase the time to a half hour or more to put a dent in your piles.

When tackling this project, have the following supplies on hand:

Pencils
Manila Folders
Garbage Bags
Shredder (optional)
Banker’s Box or a Large Rubbermaid Container
Black Marker
Label Maker (optional)

Pick up one piece of paper at a time, skim it’s contents, and ask yourself the following questions:

1. What is this piece of paper?

Is it a bill? Your kid’s spelling test? The instruction booklet for the stereo?

2. Do I need this piece of paper?

If the answer is no, immediately throw it into your garbage bag. If it has your name address or any financial information on it, rip it up or shred it before placing it in the bag. If the answer is yes, continue to question #3.

3. If I needed this piece of paper, how would I find it again?

This is where your pencils, folders, and brain come into play. Let’s say you’ve just identified and decided to keep your monthly bank statement. Take the statement and place it in a manila folder. Now, think for a moment...How should you label the folder so you can find this paper again? If you only have statements from one bank, then take your pencil and write ‘Bank ­ Monthly Statement’ on the folder’s tab. If you have multiple bank accounts, you may want to separate the accounts and label the folders ‘XYZ Bank-Monthly Statement’ and ‘ABC Bank­Monthly Statement.’ Label your folders for retrieval, not storage purposes.

Now that you’ve started creating folders for all of your papers, you might be wondering...

4. How do I organize all of these folders?

Repeat questions 1,2, and 3 until all papers have a manila folder home. This may take you a weekend, a month, or the better part of a year depending upon how much paper you have and how much time you devote to the project.

As you do this, you will see that your folders are falling into broad categories. Examples of such categories are: Insurance, Warranties, Paid Bills, Investments, Home Improvements, Credit Cards, etc. Group all ‘like folders’ together under a category that you create. For instance all 401K, mutual fund, stock folders can be categorized under ‘Investments’ while Visa, Macy’s, and other credit card folders can be categorized under ‘Credit Cards.’ Physically group the ‘like’ folders into their categories using a large surface such as a dining room table, bed or floor.

Once you have discovered how many categories you have, select a color to represent each category. Color coding is one of the most helpful ways to organize your papers. Some examples are:

Bills/Finances = Green

Medical = Red

Home = Blue

Personal = Yellow

Depending upon your budget, purchase colored hanging folders, colored folders and/or colored tabs for hanging folders. If you already own standard green hanging folders, then just purchase colored folders and/or colored tabs to save some money. Or, if you are on a very tight budget, a colored sticker (made by Avery) in the corner of the manila folder will suffice as long as it is in full view.

Place labeled manila or colored folders in hanging folders and label the plastic indexing tabs (that come with hanging folders) using a black marker or labelmaker. Place the folders in that category in the hanging folder. If your folders are bulging with paper or you have many folders within a category, consider using a box-bottom hanging folder. They have flat bottoms and come in 1", 2" and larger widths. Using these prevents folders and papers from spilling out of the top of the hanging folder. Hanging folders with accordian pleated sides are another option for holding multiple files .

5. Where should I keep these hanging files and folders?

As you fill and label the colored folders and hanging files, place them by category/color in as many banker’s boxes or large Rubbermaid containers as you find necessary.

The best place to eventually house your papers/folders is a file cabinet. File cabinets come in many different sizes. The size of the one you purchase depends upon where in your home it will go and how many folders you have.

6. What can I do to maintain my files?

• Create a temporary home for new papers that need to be filed. This can be a basket or in-box placed on top of or next to your filing area.

• Devote time for filing. Spending a few minutes filing your papers at the end of the day or week will prevent you from having to file for hours at the end of the month.

• Every six months take time to go through your files and throw out papers you no longer need. If your filing needs have changed, create new categories (i.e. new baby, divorce, small business, etc.)