A Colorful Way to Organize Your Files

    File organization may not be the highlight of getting your home in order. In fact, it's pretty much a dreaded task. But let's be honest. File organization is highly important. After all, those files are your life on paper. If you lose those - or as I like to call it, temporarily misplace - it can have very, very bad consequences. Not to mention, organizing your files eliminates clutter, which makes your home office instantly look more beautiful.
    But what's the best file organization system? That's a good question. You don't want to spend hours reorganizing your files only to discover they're just as hard to find as before. So I visited Master Simplifier, Cynthia Ivie, to discover the best way to organize files. Cynthia owns White Space, a company that specializes in organizing homes and offices. To help her clients access their files easily, Cynthia has developed a file organization system you could almost consider fun. I mean, come on, it involves colors and paper shredders.

A File Organization System that Works

    Leave those manila file folders at the store. A sea of the same colored files will only make it hard for you to find what you need. Instead, opt for color file folders, which will allow you to quickly spot the files you want. Use a different color for each category of files, Cynthia suggests. But don't just pick any color for each category. Use the color you associate with that topic. It will make it easier to remember which color each topic is. Cynthia suggests using the following color-coding system:

• Green for financial files. After all, our paper money is green.
• Red for family or home files. As Cynthia said, "Those are matters of the heart."
• Blue for career and education files. It's the color of scholarship, even though most graduation caps are now black. Just think of blue ribbon awards.
• Orange for health and fitness files. Orange is fun and energetic, the way we should feel on the treadmill. Yeah, it's an optimistic outlook of health.
• Purple for hobby files. "Purple is the color that people are usually passionate about," Cynthia said. And I know passion is the first word you think of when you think hobbies.

    Once you've got your files sorted into colors, the next step is to alphabetize them. Within each category, finances for example, there will be smaller sub categories. To make those subcategories easy to access, it's smart to put them in alphabetical order. After all, the color-coding will no longer help you at that point.
    "Green is the color with money, and so green folders relate to everything financial," Cynthia said. "Then it's alphabetical. So, auto, banking, credit, housing, insurance, investments, legal, mortgage, taxes, things like that are all in green."

Throw it Away - When it's Time of Course

    Don't think your finished organizing your files after using the color file folders and your alphabetization skills. It's now time to bring out the big gun: the paper shredder. An important part of file organization is disposing of the files you no longer need.
    "The biggest mistake people make is keeping too much paper," Cynthia said. "There are records retention guidelines. The IRS has three years to issue an audit from the date of filing if you're current on your taxes. So, we really recommend purging everything but the tax return after three years.
    "There are other documents that need to be kept longer. Obviously deeds, marriage licenses, divorce decrees, birth certificates, wills, social security cards - things like that. If you talk with your accountant or your attorney they can tell you.
    "People just need to learn to travel light when it comes to filing. There is no reason to have a storage budget that rivals the Pentagons for storing all the documents of your life."
    When rummaging through and getting rid of your out-of-date files, don't make the mistake of just throwing them out. You'll run the risk of having your identity stolen. Instead, you've got to shred them. Shred every single document. It's the best way to protect yourself, which really means your money, home and lifestyle - the things that could be destroyed if your identity was stolen.
    "It's no longer optional to whether or not you tear it up into millions and millions of pieces and throw it in the trash," Cynthia said.

Eliminate the Paper Trail

    A smart way to approach file organization is to eliminate the number of files you have to organize. One way to do that is signing up for online banking, which will also help to reduce your chance of having your identity stolen.
    "We do recommend setting everyone up on electronic payments," Cynthia said.  It's easy. It's secure. It's a safe way to go. It eliminates that paper trail that so many thieves rely on for identity theft today. In the state of Illinois, identity theft went up 25 percent last year, and the number one source for identity theft was trash."
    Consider signing up for online banking, and again remember to shred every document before it goes in the trash.