Storing financial records can be stressful if you don’t know what you’re doing. If you’re someone who holds onto things for way too long out of fear or throws away everything, this guide can help you find a middle ground. While you don’t have to stash store receipts for years and years, there are specific financial records you should keep for several years and some permanently. We walk you through the most common financial documents you’ll run into and offer our advice for how long to keep credit card statements and other finances.

What financial records should you keep and how long?

Tax records
Some people advise you to keep your tax documents for seven years. This habit isn’t a bad idea if you want to be ultra-safe. However, the IRS suggests keeping federal tax documents for three years since you can be audited up to three years after you file a tax return. It recommends keeping your tax records for seven years if you file for a loss from a bad debt deduction or worthless securities and for six years if you underrepresent the amount of income you made by 25% or more. If you prefer to be cautious, it makes sense to keep your documents around for seven years to cover yourself in all instances. Your state may have different requirements for its taxes so check to see how long to keep your state tax records.

Monthly statements
When contemplating how long to keep credit card statements, make sure to hold onto credit card statements for one year unless you use them for your taxes. Then you’ll want to store the documents for three years and the same goes for bank statements. With online banking extremely popular, your bank or credit card provider probably offers digital records as PDFs. However, be sure to save them on your computer rather than relying on being able to log into your account. If you close the account, you may forget to download your statements. Saving them each month will help make sure you have the information if you need it.

Paycheck stubs
For stubs from your paycheck, you’ll want to keep them for one year until you file your tax return. That way you can compare the paycheck to your W-2 before you file. It’s a good idea to check the amounts listed on your stubs and match up to the number on your W-2 to ensure there was no mistake in your earnings or your social security withholdings. After you file your taxes, you can dispose of the stubs.

Property records
When you buy a house, keep any documentation relating to the purchase of your home. You’ll also want to hold onto receipts and proof of major home improvements you put into the house. The reason? When you go to sell the house, you’ll need this evidence to calculate your capital gains on the property. You may have to hold onto these for a while — six years after you sell the property or until the statute of limitations lapses.

What about the documents saying you paid off a mortgage in full? Keep the records proving you repaid your mortgage forever.

Utility bills
You’ll want to keep utility bills — gas, electric, internet, phone service — for one year. However, if you are using the bills as a deduction for a home office, you’ll need to keep them for three years. If you’re tracking these expenses for a work-from-home business, be sure to print them off or save each document electronically each month in a place where it will be easy to find when it comes time to file your taxes.

Records of satisfied loans
If you have taken out an auto loan, a personal loan or any other extension of funding you paid back in full, keep the documents proving full payment for seven years. You don’t want to come up empty-handed if you’re asked for proof you paid back the loan in the time frame. The only exception to the seven-year rule? A mortgage paid in full. As mentioned before, because a house is such a large purchase, you want to keep the records stating you own the home outright forever.

Contracts
You may sign a contract to complete work for someone else or vice versa. A contract is vital while it’s active but after it expires, it probably doesn’t do you much good. There’s no real need to hold onto the contract after it expires unless you foresee potential legal issues on the horizon. If you expect any sort of contract dispute, hold onto the contract and any letters, emails or text messages which can help prove your case. Otherwise, you’re free to toss it.

How to safely destroy financial records

After the time limit expires on these documents, you can safely dispose of them. However, all of the documents mentioned above contain sensitive information, like your full name, your address, your account numbers, your phone number and possibly your full or partial social security number. Some identity thieves aren’t above digging around in your trash for this information, so you don’t want to place these records in the trash bag or recycling container and call it a day.

Instead, using a proper shredder will make the documents impossible to read. Invest in a cross-cut shredder, a diamond-cut shredder or a confetti-cut shredder. If your shredder simply cuts the paper into strips, a thief could reassemble them if found. When your documents and credit cards are disposed of in this way, you’ll have taken one additional step to protect yourself from identity theft in the future.

Keeping financial records can seem daunting at first, but it’s relatively straightforward once you understand the basics. By following our guide on how long to keep your documents, you’ll be one step ahead of the game if any issues arise. Additionally, if you ever wonder whether or not you should keep a record of something, it’s usually better to be safe than sorry. While keeping your pay stubs for 20 years might be overkill, finding a time period that makes you comfortable is what matters most. That way, you’ll be prepared no matter what happens.