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Purge items once a week. Usually at the end of the week, take the time to shred and throw away any unnecessary paperwork.
Keep in mind that you always want to keep financial documents for five to seven years. However, any other files that do not contain pertinent information to your business or personal finances should be tossed each week. A shredding machine would be perfect for this purpose as it properly destroys documents and important papers. There are large shredders as well as smaller ones if you don't have papers to shred on a regular basis.
Different brands have different amenities, so the best way to choose the one for you is to peruse your local office supply store and have an employee demonstrate for you how several different types work.
No home or office should be without a shredder. In fact I recommend people keep one near the place the mail is opened. It's handy for destroying those unsolicited pre-approved credit card offers or anything else that contains personal information. When in doubt - shred.
Talk to your tax adviser about any special recommendations she may have for records. Unless you need to keep a bill for your taxes, you are probably safe destroying it as soon as you received confirmation that it has been paid as indicated on the next month's bill). Also bear in mind if you are thinking about moving, some real estate agents recommend displaying the utility use for your home over the last year.