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Get Organized: Digitizing Personal Documents

"One of our best practices that we advise our clients to do is to safeguard and digitize their important documents in one of our digital vaults,"  Deirdre Prescott, President and Founder, Sandy Cove Advisors, LLC.  

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Why scanning some of your most important paper documents at home will help you sleep easier.

Computers are very good at searching. Computers are also excellent at retrieval. No matter how fast and efficiently you think you can find and retrieve information in your house from pieces of paper, rest assured, computers can do it faster.

That is the A-number-one reason you should digitize many of your personal documents.

There are more reasons, too, like the fact that you can't even get to the information on that flood insurance document when it's on a piece of paper in your kitchen while a canceled flight has left you trapped on St Kitts, due to a hurricane back home. Wouldn't that be a handy time to have a digital document, accessible from your laptop, smartphone, or tablet?

Here's another: You've changed doctors, insurance programs, and pharmacies several times in the last few years, and the pharmacist now needs to know you if you've ever taken a certain medication. Wouldn't it be useful to log into some secure system that has records of all the prescriptions your doctors wrote because you snapped with your phone's camera before getting them filled?

Or maybe you're motivated to digitize more of your personal documents simply to get rid of clutter. The reasons for doing it are endless, and the excuses for not getting started are, too. Here a few tips and tricks that will leave you with no excuse for putting the task off any longer.

What to Digitize

Before you can reduce the amount of paper in your home, you have to decide which documents hold value in being made digital. In many cases, you'll want to keep the original documents, making the digital one essentially a back-up. This list might help you generate ideas:

• taxes

• tax-deductible receipts

• paystubs

• deeds and leases

• warranties

• passports (many countries have very specific rules about making copies of passports; check with your government)

• family archives, such as birth certificates, adoption papers, marriage certificates, death certificates, and immigration papers

• insurance forms

• medical and dental records, and prescriptions

If your employer doesn't provide electronic paystubs, you should absolutely keep the originals for at least six months, if not a full year. Banks and landlords often require these documents, in addition to tax forms (W2s in the U.S.), when completing financial or housing paperwork.

With passports and some other official legal documents, be careful about the rules for making copies. It's usually a good idea to shrink or enlarge the image by at least 10 percent (so it doesn't look like you're trying to counterfeit it).

Even if you don't think you'll ever need to provide replicas of any of these documents, there will certainly be times when you need to reference your passport number (for an application, say) or some other piece of data from them. It's so much more efficient to search for that information from your computer than to start digging through a closet full of papers.

What Not to Digitize

Manuals. One batch of papers you can likely toss is manuals. PDFs of most manuals for appliances and gadgets are available online through the manufacturer. Occasionally there's value in keeping a copy, however. I've found that in reselling items (particularly self-constructed goods from a popular Swedish purveyor of post-college furnishings), I have more negotiating power if I can provide the buyer with the instructions guide, warranty, and receipt. If there's a chance you might resell a purchase down the road, take the time to scan the documents and save a copy.

UPCs. Sometimes, to cash in on a warranty, especially for small appliances and consumer goods, you typically need to summon an original UPC codes, and because you would never need a UPC for anything else, it's a clear example of a "document" that would have zero value in digital form.

Some receipts. Receipts are tricky. For any tax-deductible purchase, keep the original receipt and scan or photography a copy. (You might also log the purchase in a spreadsheet and type into it the file name of the scanned copy or photo.) I hang onto receipts for things that I might reasonably find faulty, but I don't keep a back up copy. The effort it would take doesn't meet my threshold for payoff. But I do keep receipts for big-ticket items. And I do save digital copies of receipts for online purchase because that work is already done for me. All I have to do is save and rename the file how I want it.

What To Do With the Originals

When you don't need the original papers anymore, shred them and recycle them.

When you do need to keep the original documents in addition to the digital file, you'll need a tight and clean system for storage. Actually, you need a system for storing papers that tend to pile up quickly and frequently but aren't a high priority for scanning, too.

Family archives. Delicate documents that you intend to pass down generations, like original birth/marriage/death certificates, deserve special treatment. I'm no expert on preservation, so see the U.S. National Archives' paper preservation tips instead. In addition to protecting those documents from light and moisture, you might also invest in an inexpensive fire-proof lock box.

Short-term storage. For bits of paper you collect frequently and don't necessarily want to digitize on the spot, such as receipts and monthly invoices, I recommend using a very low-tech solution that doesn't create clutter but is very easily accessible. In my house, a have a few places where I tuck paper out of sight until I have a chance to scan it. An ordinary cardboard shoe box in my linen closet houses warranties for small appliances. I keep receipts in a plastic folder—one side for everyday purchases and the other for receipts from vacations and traveling. I have another folder where paper-based recipes go until I have time to scan or type them. For all my short-term storage needs, I've used simple solutions that are easily accessible so that I never have an excuse for leaving a slip of paper on the kitchen table. The folder is just over there, on the bookshelf, and it will take me approximately six seconds to file it away until I have more time to scan it.

Longer-term storage. Once you scan and make use of the documents in short-term storage, you can likely shred or recycle them, or in the case of tax-applicable papers, move them to longer term storage.

If you have a filing cabinet at home, use it. If you don't have a filing cabinet (I don't), buy a simple accordion organizer for less than $20 from any office supply store. Big box stores, chain pharmacies, and greeting card stores often sell them as well. Accordion files blend right into bookshelves and do the same thing as a filing cabinet.

February 27, 2012 1:26PM EST

By Jill Duffy, PCMag