Ideally, we would love to have all aspects of our lives organized, compartmentalized and decluttered. But when it comes to maintaining our documents, well, let’s just say it could get difficult to map the method to our madness. So, here are a few pointers that should keep us on the straight and narrow.
The 5 S Concept
Sort, Simplify, Standardise, Store and Sustain, the 5 S concept will go a long way in streamlining our filing system, making it maintainable, intuitive and accessible.
Sort
Collect all the documents on hand and go through them. We should keep the ones that are relevant and delete or dispose of the ones which we know we will not need in the future, like outdated paper work, bills, expired insurance policy copies or unwanted receipts.
When physically disposing of any document that holds sensitive information such as our address, PAN details, Aadhaar card number, account details etc., we need to make sure that we do so responsibly. Investing in a shredding machine is highly recommended, but if that is not possible, find photocopiers or shops that will cut and shred the documents, making it easy to discard the documents without worrying about anyone accessing our details.
Simplify
Now that we have all our relevant documents, we can take the next step of segregating them. The files can be segregated based on the following criteria:
i. Categories – The categories can be assets & liabilities, income & expenses, tax documents, insurance and personal documents.
ii. Time – The year in which the document was issued or how long do we need to keep the document for (1 year, 3 years, 7 years and beyond, lifelong).
iii. Type of documents – Different types of documents need to be filed separately.
iv. Action that needs to be carried out – Whether the document needs to be read, filed, renewed or paid.
Standardize
We’ve already covered which documents should be maintained physically and which can be digitized, we suggest scanning and digitizing every important document. This way, we always have a backup in case anything is missing or misplaced.
Scan the documents and save them using a folder system that is intuitive. Use relevant names for the file that include the type of document, mention the individual and the accurate year/date for the document.
Eg: BankStatements_MrXYZ_FY2020-21
Physical copies of documents should also be filed in folders and labeled in a similar manner, ensuring easy retrieval.
We can use the folder system shared here, to start saving our documents in an organized manner.
Store
Once the digital folders have been created, we can either save them on a password protected programme, an external hard drive or subscribe to a cloud service. It is extremely important that we assess the attributes of the cloud service before subscribing, in terms of privacy and security, space and accessibility, as well as the cost of subscription. Once satisfied with the terms offered, only then should we make the call. If saving our documents on an external hard drive, we need to make sure that the hard drive itself is kept safely, preferably in a locked cabinet.
For documents that have to be maintained physically, such as personal documents, we can choose to keep them in bank lockers. While this safeguards them against theft and fire, we can access them only during banking hours. Safety vaults, on the other hand, are 24 hour facilities where we can access the documents any time we want at a premium.
Sustain
Schedule a review of old files and new paperwork at regular intervals. This helps in monitoring the relevance of old documents and ensuring that all new paperwork is filed on time and nothing is lost or misplaced. Whether we take this up weekly, fortnightly or monthly, we need to stick to the schedule, no excuses.
This is a broad roadmap to help build a system that simplifies our efforts in preserving important documents. However, we need to stay committed to it for it to really work for us. We recommend taking each step at a time and not getting overwhelmed by the entire process. Once it is in place, sustaining the system should seamlessly fit into our schedule.
