Sort your mail and other papers. Throw out, recycle or shred everything you don't need right away. File away things you need to keep (statements, ID, etc.). Now you're left with one pile -- things that require action. And you have a clean space in which to complete the rest of your paperwork.
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It's really hard for me to throw away paperwork - always afraid I'll need it. I'm using a free pdf maker program on my pc and scanning documents, filling them on a portable hard drive, and then shredding the paperwork. Periodically I backup onto DVD's. I also recycle the shredded paperwork to get it out of the house.
I wouldn't shred IRS, contracts, etc. until they are out of date (with IRS I err on side of longevity just in case).
It not only frees up space but it's a good feeling to watch all that stuff leave. Whenever possible I use electronic billing so that I'm getting less in the mail.
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