10 Tips for Paperless Record-keeping

Paper statements, receipts and other documents scattered around the house are easy to misplace and create a storage and organization challenge. Additionally, they pose a much more serious threat of identity theft if they get into the hands of the wrong person. Transitioning to a paperless home office can help you clear clutter and protect your personal financial information. To make the paperless switch, gear yourself with a computer with Internet access, a scanner and the following tips.

1.       Elect to receive paperless statements.  Each month you may be receiving paper statements from your bank, credit card company, cell phone provider, energy provider and other companies you do business with. To cut down on clutter and paper, you may be able to elect to receive your statements electronically.

2.       Switch to online bill-paying options.  Many banks provide customers with the ability to pay bills online, and studies show that online bill pay is now used by more than 60 percent of the online banking community.  Paying bills online is often faster and easier than writing and mailing a check. Online bill-pay users can also schedule automatic payments to ensure bills are paid each month and avoid late fees.

3.      Use strong passwords. Passwords or PINs should be used when accessing an account online. Your password should be unique to you, and you should change it regularly. Do not use birthdates or other numbers or words that may be easy for others to guess.

4.      Don’t fall for phishing scams.  Avoid getting hooked by criminals who send e-mails encouraging you to reveal personal financial information, such as account numbers, passwords or Social Security numbers.  The e-mails may appear to be from trusted banks, retailers or other companies and often says the company needs to verify your information for security reasons. Remember that your bank will never ask you to reveal passwords or other personal information via e-mail.

5.      Use caution when conducting transactions online. Encryption is the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a padlock or a key whenever you conduct secure transactions online. Avoid sending sensitive information, such as account numbers, through unsecured e-mail.

6.      Protect your computer.  If you are making the switch to paperless record-keeping, make sure you are protecting your computer and financial information by arming your computer with a good firewall and software to combat spyware and viruses.  Update the software regularly to ensure you are fully protected.

7.      Backup your files. Upgrade your computer’s backup system or invest in an external hard drive to store your backup files. Then scan and store receipts and documents electronically. Many banks offer online statements that you can download as PDF files and store on your computer.

8.      Know what to keep and what to purge. There are many reasons to keep records. In addition to tax purposes, you may need to keep records for insurance purposes or for getting a loan. According to the IRS, good records will help you identify sources of income, keep track of expenses, keep track of the basis of property, prepare tax returns or support items reported on tax returns.

9.      Shred for safety. Invest in a shredder to safely get rid of old files, paid bills, scanned documents and other unwanted paper, such as credit card offers.  Shredding your documents helps to keep your personal financial information from getting into the hands of identity thieves.

10.   Turn to your local banker. Talk to your local banker for more information about protecting your financial information.

These financial tips are provided by Iowa State Bank in partnership with the Iowa Bankers Association. If you have specific questions about the use of credit, contact your local banker at Iowa State Bank. Iowa State Bank is an Equal Opportunity Lender. Member FDIC.

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