Laura provides five steps to manage your finances with no or much less paper. Learn the pros and cons, a few paper exceptions to consider, and how to make a digital transition as easy and comfortable as possible.
When my husband and I moved an overstuffed, four-drawer filing cabinet from Florida to California a couple of years ago, I knew it was time to downsize my paper records.
I had already done a huge purge before the move, but I was still holding on to way too much paper. Now, I keep a fraction of the paper in one file drawer, but I have to admit that getting there hasn’t been easy.
In this episode I’ll give you 5 steps to manage your finances with no or much less paper. You’ll learn the pros and cons, a few paper exceptions to consider, and how to make a digital transition as easy and comfortable as possible.
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Pros and Cons for Going Paperless
Moving your money management into the digital world comes with huge benefits. I’m sure you know that going paperless saves trees and a host of other environmental resources.
According to the Environmental Protection Agency (EPA), paper makes up 27% of all municipal solid waste. That’s the largest percentage of the 250 million tons of waste we create in North America each year!
According to payitgreen.org, by going paperless for just one year, the average household saves 6 pounds of paper, 23 pounds of wood, and prevents the production of 29 pounds of greenhouse gases.
Paper documents also demand our time, attention, and physical space to process, store, or shred. Plus, many contain personal information that could be used against you if they fall into the wrong hands.
On the flip side, digital documents are easy to store, organize, and find later on. However, there are some downsides to consider, like security. I’ll tell you how to stay safe and which paper documents you still need to keep, in just a moment.
5 Secure Steps to Manage Your Finances Digitally
Here are 5 secure steps to go paperless with your personal finances:
Step #1: Transition to e-documents
The first step is to shift your thinking and realize that paper is not your friend. If you open up your physical mailbox and see paper inside, ask yourself how to avoid getting it in the future.
Here’s how I handle my mail:
- Throw away junk that doesn’t contain personal information, such as my name, address, or account numbers.
- Shred junk that does contain personal information, especially pre-approved offers for credit cards and insurance.
- Shred documents that I can access online, like utility bills and insurance policies, and then request an e-document, when possible.
- Scan documents that I need, such as statement that isn’t available online or a business receipt, and then shred the original.
- File original documents that I need or want, such as a product warranty, a signed contract, or a handwritten note.