It took me years to fully understand the benefit of a file system. I tried all kinds of methods to organize the papers surrounding various work projects. At one point, the perimeter of my office floor had neat stacks of papers against the baseboard, each with a clean sheet of paper on the top with the name of the corresponding project in large type. But after taking my first week-long David Allen course on Getting Things Done in 1998, I started filing and have never looked back.
I firmly believe that every person over college age should have four high-quality file drawers available to them for their paper archives and projects. When I was working in a job that required constant access to my files, I had two two-drawer cabinets placed close to my desk so that I could roll around in my chair and file papers without getting up.
Now I have file cabinets in a closet, which is fine since I mostly file for reference and financial purposes now; my organizing projects rarely require a lot of paperwork.
Your circumstances will determine how active your files are and how easy to access they need to be. Even if you are retired and have few paper-heavy projects, I still think files should be in the house rather than the garage or off-site, because the harder it is to file something, the less likely it will ever get filed. Then you get back to a piles and stacks situation, and it becomes difficult to impossible to find anything.
My files are a mix of reference, archives and active projects, and I can find what I need quickly and easily. Because I update and purge my files regularly (a good thing to do when you are on hold with tech support or another long hold-time call) my files are relevant and vital, not useless extra weight.
Depending on the thickness of your tax documents are each year, you may need separate labeled bins for these (ask your CPA how long you need to save them) and store them in the garage or attic. But if you have fairly simple returns, there is no reason they can’t reside in your file drawers with your more active projects and documents. If you are comfortable just having the electronic version of your tax returns, you won’t need to keep the paper ones at all. Just be sure to have some sort of backup system, whether the cloud or an external hard drive, or what have you. Your CPA may also be willing to keep copies of your returns on his or her system.
Don’t fill your file drawers. File drawers should remain at most three-quarters full so that filing and finding files is easier and kinder to the cuticles. Over-stuffed drawers prevent the filing of new items. If you have to, buy more file cabinets rather than over-stuff. Or better yet, purge whenever possible. Studies have shown that more than 80 percent of what we file is never looked at again. So, with the exception of very important documents, do you really need to save it?
Now, for you artistic and visual types: Resist color coding. Keep it simple with army green hanging files and manila folders. Color coding is far more trouble than it is worth. Companies invariably change or discontinue folder colors and thus color coders must constantly tweak or change their systems. Also, if you run out of mint green folders and have a mint green-coded item to file, will you immediately run out and buy mint green folders? The item will most likely get stacked on top of a growing “to be filed” pile.
Alphabetical files are very efficient, with the benefit that anyone can find something in your system if it is labeled logically. If you have a lot of one category, it could warrant its own drawer and within that drawer be labeled alphabetically. For example, Financial may warrant its own drawer. If you’re a car collector Auto may warrant its own drawer. And so on.
In a general A to Z drawer, the most logical way I’ve found to file papers is by subject first, then more specific subject. For example, “Autos, Dodge” followed by “Autos, Prius” and “Financial, Banking” followed by “Financial, Taxes”, etc. So make the files as specific as you can without getting too nuts. If you have just one home, a file labeled “Home Receipts” will suffice, but if you have several homes, you would need a file for each: “Home Receipts, Tahoe,” “Home Receipts, Santorini,” “Home Receipts, Paris” etc.
It goes without saying, almost, that labeling files with my BFF the Brother P-Touch labeler in black type on white tape makes the system look incredibly coherent and makes finding files very quick and easy.
Note: For quick evacuation purposes, you probably want to have a file box that contains all of the files that you need to take with you in case of an emergency. It’s tedious not to have all files in one place, but unfortunately, we need to be ready to go quickly, and pulling files from file drawers when you’re under duress is not realistic. A box containing papers you want to have with you if you need to evacuate your home must be ready to pick up and go. Label it clearly and make sure a few other people know where it is located so that if you are not home in an emergency, someone else might be able to grab it for you.