Half the battle of paying bills on time, being reimbursed for expenses, and keeping financial tools like insurance up-to-date is finding the right document when you need it! And, one of the reasons it's hard to find the right document is that many of us keep too many documents.

Everyone needs to find their own system for organizing financial documents. For me, the key is to minimize what I keep.

I classify many documents as "Active" meaning they're current but I don't plan to keep them long. For example, most receipts, credit card statements and other bills can be disposed of as soon as your next bill comes showing your payment. Keep medical bills until they're completely paid and resolved, both by you and your insurance company.

You may want to selectively keep some of these documents longer if they document either your income or expenses that you've included in your tax return. These documents I classify as "Tax Return" and go in a file folder labeled Taxes 2015. Then when I prepare my tax return, most of the documents I need are all in one place.

Even pay stubs likely can be disposed of as soon as you receive your W-2 and it lists your income accurately. If your pay stub includes other information such as proof that you had health insurance, then you want to include these in your Tax file.

Active financial paperwork never makes it into my "Save Forever" file cabinet. I have a small file box with several hanging files that I use for this paperwork. When these files start getting full (about once a year), I go through and dispose of just about everything.

Most people recommend keeping your tax returns and all documents that support the information on your return for 7 years. While the IRS usually has three years to audit you, it has up to seven years under certain circumstances. However, some people even say keep them forever. Another option is to scan your paper documents and store the electronic files on an external drive, with a back-up on another device. Or, put them in a box in an out-of-the way spot!

Paper you're disposing of can be either recycled or shredded. Shred items that include personal information such as:

• Social security number,
• Account numbers,
• Birthdate,
• Signatures, and
• Passwords and pins

Other important financial information such as auto titles, home deeds, and investment account statements you may need to keep for a long time. Essentially you need to keep this information until you sell the property.

Personal documents such as birth certificates, social security cards and citizenship papers all need to kept essentially forever.

The Federal Trade Commission has a great infographic that you can print out and put next to your biggest stack of papers. Then you can refer to this as you sort out your papers and begin to clear the clutter.

I have also started receiving and keeping some financial documents (such as insurance policies) in an electronic format. I can typically find these on websites if I need to refer to them too, and it has helped decrease the paper clutter. What strategies are you using that help you? I'm always looking for new, effective ways to organize finances as I'd much rather do just about anything than file papers!