This time of year as many people go through their clutter of receipts and financial statements from the previous year, I always get asked, “how long should I keep my financial statements” or “do I need to keep this for any reason”? I’ve decided to write a post on how long to keep financial statements: what you need to keep, for how long, and some of the reasons why you need to do so. As an added bonus, I created a financial statements checklist in PDF which you can download for free. The benefit of this is that you can keep the sheet in a folder with all of your other financial records and always have access to it.
How Long To Keep Financial Statements
General Financial Statements
Each month, you should be reconciling your checkbook to the statement that the bank sends you, or you get online. After you verify everything is correct, you should keep the monthly statements for one year. The exception to this is if there was a purchase made that relates to taxes, home improvements, a business expense, etc. In these cases, you will want to hold on to the statement permanently, or until you sell the house/business.
(Note: Since many have online access to your statements, you may ask why the need to keep them. After all, the bank can get them for you. While this is true, most banks will only do this for you back to a certain time, say two years. Anything older is considered “research” and they charge you per the hour for this. The average charge: $25/hour. And while it should only take a few minutes to pull up your account history, who is to say it won’t take them a few hours because of the “complexity” of your account history? Save the statement, avoid the fee.) [Read more…]