How to create an effective filing system

One Sparkleize reader writes:

Dear Crystal,

I have a nice two-drawer file cabinet but I am an unorganized person. Right now both drawers are stacked with various nonsense in no particular order. Can you suggest a method to:

1. Prioritize contents

2. Maintain order and ease of finding

3. Keep everything current

4. Not drive a lazy clutter-hound like me crazy

I want to get rid of decades old bills and weird slips of useless paper, but it’s all a big tangle. Help!

Sincerely,

Disheveled in Durham

Dear Disheveled reader,

Here is my step-by-step advice for organizing your file cabinet.

You can implement the whole plan, or just a few of the ideas. If you do decide to put the full plan into action, I recommend allowing yourself to take each step one at a time. Break them into mini tasks if needed, rather than trying to complete all the steps in one day. Keep in mind that each step is a huge accomplishment, and good luck!

Creating an effective filing system

Consider gathering these supplies before you begin:
• 1 box of hanging file folders
• 1 box of manila folders
• 1 box of manila file folder labels in assorted colors
• 1 box of envelopes (either manila or standard letter-size)
• A few sets of brightly colored sticky notes
• 2 bankers boxes
• 1 stacking file tray (should contain at least 2 levels, compartments or slots)
• 1-2 Sharpie markers
• 1 large cardboard box or other container to function as a paper recycle bin

Step 1: Develop an outline of your filing system. Decide what file folders are priorities for your cabinet by mapping out the system, keeping it as simple and logical as possible. To give you an example, here’s a map of my own filing system. Note that the bold, non-bulleted items represent hanging files, while the bullets represent manila folders.

Step 2: Create and label the file folders to correspond with the outline you developed in Step 1. But don’t put them in the file cabinet yet!

Step 3: Prepare to sort and file by removing all paperwork from your existing file cabinet and setting it aside.

Step 4: Sort methodically. To do this:

  • First, lay the manila file folders you’ve just created above on the floor. Preferably, they should be laid out or grouped in order so you can find them with ease.
  • Scoot a cardboard box near this operation to function as a paper recycle bin.
  • Now begin sorting your existing paperwork into piles on top of the corresponding file folders, keeping folder names visible. Don’t stop until all documents have been sorted! Do not be shy about using the recycle bin. Ask yourself, “Will I really ever need to look at this document again?!” If the answer is “No” or “Probably Not”, you know what to do. Like I always say, “When in doubt, throw it out!”
  • Implement the 5-second rule. As you sort, it is likely that you will get sidetracked and be tempted to read all those long-lost documents. To avoid this scenario, allow yourself only 5 seconds (yes, that’s plenty of time) to glance at the document and decide where it goes! You can read the documents later!

Note about confidential documents: If any documents you wish to throw out or recycle contain your banking information, credit card numbers or social security numbers, it is best to shred or destroy them. You can purchase a shredder for $50 and up. Alternatively, you can destroy them yourself.

Step 5: Archive the old stuff.
The bankers boxes allow you to archive old files. As a rule of thumb, I archive the following:

  • Receipts older than six months,
  • Tax files older than two years, and
  • Paid bills and other paperwork older than one year.

Choose a regular interval (for example, once every 6 months) at which time you’ll go through you file cabinet to archive your older documents. Label the outside of your banker boxes so you’ll know what they contain (e.g., “Files from 2007”). Suggested storage areas for banker boxes include attics, basements, closets. Keep them away from moisture, preferably elevated off the floor.

Step 6: Create replacement folders (if necessary). Create and label new manila folders to replace the ones you’ve archived. (Example: If you’ve just archived “Taxes 2007”, now’s the time to create a folder in your current files for “Taxes 2008”.)

Step 7: Make a plan. Sustainable file management means sticking with a system that is both easy and intuitive. I recommend using the Three-Slot Paperwork System for managing all of your incoming paperwork.

Bonus tips:

  • Use envelopes to manage your receipts! Grab some standard letter-size envelopes, and label one for each month (“Receipts January 2008”, “Receipts February 2008”, etc.) Each day, transfer receipts from your wallet and pockets directly into these envelopes, and then file the envelopes back in your filing cabinet.
  • Scan and file your documents electronically on the Web whenever possible, particularly those you would be inconvenienced to lose in a house fire! Online document storage will also come in handy if you need to access something while away from home. Good sites for online document storage include Backpack and Box.net.
  • Reduce the number of your incoming documents. Ask your bank and utility companies to stop sending your bills via the postal mail. Pay them online instead, and keep an electronic (rather than paper) file of your statements.

Have more ideas? Write to Crystal and let her know!