Money Talks, So Should You

Go paperless: Three steps to save your files forever

Scott Bilker
by Scott Bilker, Dimespring Contributor  (@scottbilker)

Now it’s time to get your stuff and save it in your new digital filing system. But some of you may be thinking, “Scott, why should I bother saving these bank statements to my computer when I could always log in and get them anytime from the bank?”

Good question – the answer is, you may not have that account next year. It could be closed or changed, and then you won’t be able to get your old statements. If you have them in your digital filing system – you’ll have your stuff forever.

Here are the three steps to take:

Step #1: Set up online bill pay accounts

To avoid sending checks by mail, set up online accounts for all your credit cards and bills to start paying all of your bills online to avoid sending checks by mail. You don’t have to set up every online account at once, but start the next time you’re getting ready to pay a bill or when you receive information about an account by snail mail. Doing this will also give you the ability to save your statements as PDF (portable document format) files. I receive email when my account statements are available to pay, but I also have the snail-mail version as a reminder, which I shred when I’m done balancing my accounts.

READ: Going paperless: Four benefits to digitizing files

Setting up online accounts means that you need good security: unique passwords for each account. To juggle different passwords, create a document (MS Word, OpenOffice, or Google Doc) to keep the information. Do not name this document, “Passwords.doc,” because that just makes it too easy for hackers if there ever was a security problem. Try something like “Vegan Recipes.doc” – most people will pass over that one. Each account listing should look something like this:

Chase Visa 1234 (Bank Name Last 4 of account number)
Account Number: 4123 1234 1234 1234 (Login link)

(Online account details)
username: jackbauer
password: 24bestseriesever

Linked accounts (accounts you’re using to pay bill online)
Sovereign Checking
Routing Number: 123456
Account Number: 123456789

Step #2: Pick the low-hanging fruit

Save the files created by banks, insurance companies, utilities, etc. When you pay your bills online, look at the menu options for “PDF of statement” or “Online Statements” and find the latest statement and download it. You want the PDF version. Open using Adobe Reader (or Acrobat) and select “Save As” in the proper folder in your “Paper Files” directory.

Be sure to rename the file to something like, “20120815 Chase 1234.pdf,” because files sort chronologically by name. That format is: <year|month|day account-name last-4-digits-account-number.pdf>. In my example, this file would be saved in the directory as:

Paper Files/Banks/Credit Cards/Chase

Step #3: Convert paper documents

This is where it can get a little more difficult. Converting documents to PDF files requires
some work. There are a few systems that do the conversion, such as NeatDesk, but they are expensive and require specialized software to keep your scans organized. If these companies fail at some point and don’t support future versions of Windows or MAC OS, that could present a problem. That’s why I like to have everything as PDF-only files, that I organize, and in my own directories, so that 10 years from now – everything still works perfectly.

READ: Go paperless: Set up your files with Google Cloud

Another option is to scan every document with a standard scanner. There are many available that will scan to PDF and use OCR (Optical Character Recognition) to make the images searchable. This approach works, but takes time to turn on the scanner, set up each scan, do the scan, and then create the PDF.

I find that the easiest way to create an image of a document is to take a picture of it with a digital camera using the macro setting and flash. You don’t need an expensive camera, just a simple compact, point-and-shoot camera like the Canon PowerShot A2200 ($69). I use an old Pentax Optio S5i—it’s only $15 used.

A camera can digitize any size document without much hassle. Just put the paper on the table, take out your camera, and shoot the picture. Next, convert the image to a PDF. The best software to do that is Adobe Acrobat, which costs about $200. The price is worth it, because you’ll end up using it for much more than this task.

Acrobat can select multiple image files and convert them to one PDF document. From there you can rotate all the pages in one step and then use the OCR on the entire document. Acrobat can crop the images quite quickly, too, if necessary.

An alternative to purchasing Adobe Acrobat is the free CutePDF writer. Once installed, all you need to do is select the image files and print to the CutePDF writer. The CutePDF writer cannot make the images searchable; however, you can find OCR software that can by searching “pdf ocr.”

One last note to close this discussion: You can print web pages to PDF files using Google
Chrome without any PDF drivers.

Note about Taxes:
First, create a PDF file with all converted W-2’s, 1099’s, etc. and save that as one document. Then use software such as TurboTax to save PDF versions of your tax forms, which save you a hefty load of paperwork.

Now give it a try and let me know how going paperless works for you!

Scott Bilker is the founder of and author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart.