top three ways to go paperless at home

financial record-keeping in the virtual world.

by sharey wang, cpa
partner, nsbn llp

“going green” – sounds like just a buzzword – but the benefits are numerous and will provide tremendous value and forever change the way we do many things.  the day after we implemented our firm’s paperless work environment, i began to contemplate the growing files in my home storage area and realized there were three areas to consider “greening” — my mailbox, my file cabinets, and data safety issues.

1. greening your mailbox

think about all the mail you receive on a daily basis… and along with every bill comes a bulky advertising insert! it takes time to sort, write checks, affix postage and mail them by the due date.  and if you’re on vacation or business travel, you risk a late payment! wouldn’t it be nice to never see them again plus cut down your clutter?

here are some steps to follow:

1.  request your vendors to send you “e-statements” instead of paper statements.  you can either call them to request this or log online to their websites to change your account settings to receive paperless statements.

2.  create a folder in your email program where you can keep all your electronic bills once you start receiving them. if one gets lost in your in-box and you forget about it, you could get hit with late fees.

3.  set up automatic payments on your bank website; this way, the bill will be paid directly from your bank account every month.  this works well for recurring payments, with a set monthly amount, such as car or mortgage payments.  for non-recurring amounts, you will have to log on to the vendor’s website and pay the bill when it comes due through the e-statements (i.e. credit card, utilities, etc).

4.  you may also choose from a variety of bill paying services (such as intuit’s quicken®) that will automatically submit recurring payments for you. for credit cards and other non-recurring bills, they may have options available to submit the full amount or the minimum amount due, or other specified amount that you choose.

either way, your mailbox, recycle bin and filing cabinet – and many trees – will thank you.

2. greening your file cabinets

we all have some sort of filing system at home, but what if you run out of storage room? how long do you have to keep those records anyway? (a good rule of thumb is to keep records for up to seven years.) and what if there’s a fire?

greening your file cabinets means turning your existing paper files into a digital format.  here are the steps:

1.  purchase a scanner. although they are often available with a printer, a dedicated scanner that has an auto-feed feature will work best, since you will be doing multi-page scanning.

2.  organize your paper statements and invoices by vendor in chronological order.

3. create folders on your computer by type or vendor, then by year (e.g. create a “bank statements” folder; inside it, create “2010”, “2009”, etc.)  as you scan each statement, name the file according to date (i.e. “bank statement jan 2010”), then file it in the appropriate folder that you created.

this can be a pretty sizable project – break it down into small pieces and get your family involved!  (some of these records may already be available for you on your bank or credit card websites, so you can download and copy these documents onto your own computer.)

4.  once all the statements are scanned in and filed on your computer, you should shred them and put into a recycle container. do not throw any document that contains financial information into the trash!

3. greening safely

now that you have all the files organized in your computer, if your hard drive “crashes” (shuts down), chances are good that you will lose some data. take a proactive stance by backing up your hard drive and limit the damage.  here’s what you need to know:

1. invest in an external computer hard drive.  these devices are small and portable, and readily available at your local retail store or various websites online. most of these drives connect to your desktop or laptop computer through the universal serial bus (usb) port on your machine. installation is usually a matter of plugging them in and letting your operating system discover them. many of them come with third-party software to help you back them up. your data is safe on the external hard drive should your computer crash.

2. backing up your data is as simple as clicking and dragging those files you want to back up into the external drive. you can access your external hard drive much the same way you would access your internal drive or another device connected to the computer. this is perhaps the best solution for backing up your hard drive.

3. backup once a week or more, depending on how much data you are putting onto your computer.  you may be able to program it to automatically backup at certain times (such as during the night while you sleep).

4. store the hard drive either in a fireproof safe or a safe deposit box.  the ideal is to store it off-site, in case of theft or fire. if you store your extra drive on your premises, remember to grab your portable drive – if there’s time – if you are evacuated for flood or fire.

note that “cloud storage,” backing data up online to a virtual location, is gaining popularity. many bill paying sites offer this with a few gigabytes of storage for free, but charge for additional space. however, although many of these sites boast security measures, be aware that anytime you put information on the web, you should do so with extreme caution. information on the web, no matter how secure, is susceptible to hackers and security breaches, as it is out of your control.

going green is like planting seeds…the results will grow on you!  at the same time, our environment and, therefore, all of us will be better off.

posted on august 13, 2010