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In pursuit of (paperless) happiness

I used to be a pack rat. I saved every single piece of mail, cancelled check, receipt, bill and policy. I was drowning in a paper avalanche.  Finally, it was time for me to move cross country and I spent 50% of my moving expenses on moving junk!!! I had been keeping so much stuff & I realized that even if I needed any of those papers, it would be a few years before I could go through all of them and find what I was looking for. I decided it was time to get organized before being buried alive by paper. I did start with a physical organization system, but my dream was to be completely paperless. That was 4 years ago… And this is where I am right now with my dream.

This post may be useful to know – what financial documents to keep and how long to keep the documents.

Starting my paperless office dream : Cutting junk mail

Sometimes I keep the mail to look through later, but other times, I was just scared to throw the mail out. I intended to take them to the shred days once a year at my bank but that never happened. So the first thing I did was to cut the mail I receive.

  • Unwanted offers : I used OptOutPrescreen.com  to opt out of Credit card and insurance offers. I also used DMAChoice to generally cut out all the Direct Marketing mails. This includes credit cards, insurance, catalogs, retail promotions and bank offers.
  • Unwanted catalogs : Most of my catalogs were cut off using the DMAChoice but if you still get more, there are two paid services that are affordable & take care of catalogs – Mail Stopper Service and Catalog Choice. Both cost $20. I didn’t use them, but others have.
  • Unwanted solicitations : As I have mentioned before, I get a lot of charity solicitations due to charities sharing information. I personally called up the charities that I was donating to and asked them to (1) Not send me mail (2) Not share my information. I also called every charity that sent me a solicitation to request that they remove me from their list. This took a few months but it worked.
  • Unwanted magazines : I converted most of my paper subscriptions to online subscriptions and cancelled magazines that I no longer read.

Setting up my paperless office

Scanner : This is an essential piece of equipment in my paperless office. I have an All-in-one scanner/copier/printer/fax (Brother MFC 9560). It was not cheap, but I can bulk feed papers to scan and the flat bed scanner I had before was a pain to use for more than a couple of sheets.

PDF converter : Any important emails or confirmations, I used to print out and file. Now I print it to a PDF and “file” it in an e-folder. I use Primo PDF. After installation it appears as an option in the print menu. Very easy to use. There are other ones like pdf995 or Cute PDF that do the job too and all of these are free.

e-document organization system : This is not a tangible object, but more of a set up that I am comfortable with. I have separate folders and subfolders that are intuitive for me. Under finance, I have folders for checking, savings, credit cards, utilities, investments… And under each of them, I have the individual item – like 1 folder for each savings/credit card, which in turn has the latest privacy notice and also folders the last 3 years of statements.

Paperless office

 

Backups, backups and more backups : With a paperless office, I cannot stress this enough. When I first started I had it all in my laptop which died one fine morning, leaving me with – nothing. I painfully called every company I use and requested archived statements to rebuild my folders. Now I have them backed up in Amazon S3. I use that for my photos too. It costs ~$1 a month. For that price, it is so worth it. There are other ways to backing up too. External hard drive or other online back up system like Mozy, Drop Box and Carbonite. Here is a great comparison/review of all the services– The best online back up services.

Shredder : Goes without saying. After scanning and archiving sensitive documents, they are shredded and chewed up by my mighty Fellowes Shredder. This one also eats CDs and credit cards. I don’t even have to open the credit card offer mail.

Making my paperless office work

Income : I have been using direct deposits for quite some time now. I still get the paystub. I have to keep those paystubs for immigration reasons, so I scan them and then shred the original. Recently for business, I have been getting a few checks which I deposit using online check deposits. The rest of the business transactions are handled via paypal.

Spending/paying bills : Most of my utilities are billed to my credit card to maximize the cash back. The credit card bill and my water bill (they don’t take CC) are paid via online bill pay.  Most of our savings and bill pay is automated via online transfers and direct deposits.

Handling accounts : I have signed up for paperless e-statements for every account that I have starting from checking to investments.

Tip: Some banks/brokerage firms are including a monthly fee that can be waived if you use paperless statements and online bill pay. If you are paying a maintenance fee, see if your bank has this.

Reconciling statements : I use Mint and Google docs for budgeting and reconciling the accounts. As I use my credit card for almost everything starting from giving to charity to paying my power bill, I just have to look over the cc statement at the end of the month. If that looks fine, I just file it and pay the bill online.

Working in a paperless system : There is occasionally stuff that needs my signature, mainly business contracts. I have my signature digitized using GIMP, free equivalent of Photo Shop(there are some online services that do this. But you can diy using a scanner and any photo editing tool). With electronic signatures and my digital actual signature, I can send the signed contract via email or eFax. For other invoices, I either invoice the businesses via paypal or FreshBooks.

Ongoing battle with paper

Receipts : The only thing that is still not very efficiently organized are my receipts. I either scan the receipts and save them in my folders or take a photo and upload it to Ever Note. The only distinction I make with my receipts are – business & personal. I could make this more efficient and easy to find. I have heard Shoeboxed.com does a good job in organizing receipts. I will have to try that.

Caveats of paperless personal finance

As with every system, there are some problems with the paperless office too. These are some problems that I faced during my battle against paper –

  • Digital clutter. As there is virtually unlimited space to store online, it is tempting to keep everything. But I know if I do this, it will become as difficult for me to search online clutter as it would have been to search my physical clutter.
  • Errors. If I get a paper bill, at least when I open it I look through that. With e-statements, I have to allot time to look through them and download/archive. It is easy to get into the groove and not look through anything.
  • Relying on banks to do my job. Some people think that they can always download the statements online and so don’t keep a copy and organize it. If the bank decides to update the system and loses all my statements, I will be the one to suffer and no one is at fault but me. Paperless system should work the exact same way as a filing cabinet system.

That pretty much describes my paperless office, esp. my paperless personal finance. I have our health, immigration and personal system also digitized, very similar to the personal finance set up. I know my system is not perfect, but I think I am at a happy balance when it comes to how to organize and what to keep. Are you paperless? How are you organizing your system? If you are not paperless, what is your main worry? Am I overlooking anything?

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