Mellody's Mail: Financial Record-Keeping

— -- Q U E S T I O N: How long should I keep financial records? I know I should keep my marriage license and Social Security cards permanently, but what about credit card bills? Utilities? Cell phone bills? Bank statements? They tend to pile up rather quickly, and I'd rather not keep them any longer than I have to.

A N S W E R: You are correct — there are certain documents you need to keep forever, such as birth certificates, marriage licenses and your Social Security card. Additionally, legal documents like divorce decrees, adoption papers, death certificates, powers of attorney, citizenship papers and property-related documents should be held indefinitely. Ideally, these documents should be held in a safe-deposit box at a bank or a safe in your home.

With regard to credit card statements, utility and cell phone bills, the rule of thumb is to keep these items for a minimum of three months. However, if you have the filing space, I recommend you keep them for one year as issues may arise with your bills and it is always helpful to have your own copies on hand.

As for bank statements, check registers and copies of cashed and canceled checks, you should keep these items for seven years. Any supporting documents for your income tax returns — such as bank statements, W-2s, 1099s and year-end brokerage statements — should be kept for this period of time. The reason: While the Internal Revenue Service can only audit income tax returns for the past three years, it can investigate as far back as seven years if it believes income has been misrepresented.

In an effort to keep your files as uncluttered as possible, you can discard bank deposit slips and ATM receipts once you confirm the transactions on your monthly statement. Although the same premise holds true for credit card receipts, you may want to keep those receipts for expensive items, such as jewelry, in case you need to prove an item's value if it is lost or stolen.

Finally, with the rise in identify theft, it is always a good idea to either use a shredder or tear up your old receipts and bills to avoid any chance of having someone obtain your personal information for ill-use.

E-mail Mellody with your personal finance questions.

Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is Good Morning America's personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributedto this report.