Paper can be tough to get a handle on, but once you're done, you can create a system to make sure it doesn't rear its ugly head again. Nanette Duffey, a professional organizer and the owner of Organized Instincts, in Atlanta, tells her clients to gather all their papers in one place and sort them into three piles: action, keep and toss. Bills to pay, wedding invitations to answer and permission slips to return to your kid's school all go in the action pile.
Tackle this pile first, and knock out whatever you can right away. Next, create a space in your home for new paper and commit to cleaning it out once a week. File (or toss) papers as soon as you've taken action to keep a multitude of piles from accumulating.
Also keep home-purchase and home-improvement documents. Most people no longer need to pay taxes on their profits on a home sale, but if you live in the house for less than two of the five years leading up to the sale, your gains may be taxable. In that case, your home-improvement records can substantiate an increase in your tax basis, and a lower gain, if you're audited.
Keep other financial documents for a year. You can permanently cut down on the paper pile-up by signing up for paperless billing. Utility, credit card and loan statements should be available online for at least a year, and you can save a PDF copy on your computer. Back up your files to a cloud service such as Windows SkyDrive (7 gigabytes free; $10 a year for 20GB) or Apple iCloud (5GB free; $20 a year for 10GB). Want everything in one place without lifting a finger? Manilla.com links to each of your accounts, stores statements and sends you payment reminders -- and it's free.
When it comes time to toss, invest in a quality shredder. Look for a cross-cut model -- such as the Fellowes Powershred DS-2 (about $100 online) -- to make sure your account numbers can't be re-created. You can ditch receipts for anything that's not tax-deductible, pitch pay stubs after you get your Form W-2, and toss bills older than 12 months.
(Jessica Anderson is an associate editor at Kiplinger's Personal Finance magazine. Send your questions and comments to firstname.lastname@example.org. And for more on this and similar money topics, visit http://www.Kiplinger.com.)