What follows is a general guide of what records to keep and for how long.

There are things you should never throw away, such as birth or death certificates, adoption paperwork, education, military and marriage records. But when your filing cabinet is bursting with receipts and bills, throwing away the papers you don't need makes it easier to keep the important ones organized.

Tax returns. The Internal Revenue Service says you should keep your returns for at least three years. If you happened to underreport your income by 25% or more, the IRS can audit you for up to six years. The IRS also notes that you should be aware if your insurance company or creditors have different requirements.

Investments. Hold your capital gains tax reports and 1099 forms you get from investment income for at least three years with tax returns.

Individual retirement accounts. If you made a non-deductible contribution to an IRA, keep the records as long as the account is open to prove that you already paid tax on this money. With deductible IRAs and Roth IRAs, it is wise to keep track of your total contributions.

401(k) plan statements. Save your end of year statements and quarterly statements for the current year.

Pay stubs. Once you balance your bank accounts, you don't need to keep the paychecks. If you are looking to borrow in the near future, you might need three to six months of stubs.

Bank statements. Keep for three months if you plan to apply for loans. Otherwise, shred after you balance them.

Credit cards. Hold on to credit card receipts until your statements arrive and you verify that the charges are correct. Keep the statement for three months.

Checks. Shred them once you balance the account, unless you need them for tax records (such as business related deductible expenses or charitable contributions).

Loans. Keep the statement with current balance; retain the final payment evidence seven years.

Insurance policies and premium payment evidence. Keep them until the policy expires.

Medical records. Medical insurance statements, doctor's bills, prescriptions and hospital bills should be kept for five years from date of service.

Real estate records. Keep documents of the purchase, sale as well as receipts for home improvements. The improvements increase your cost basis, which can potentially lower your tax bill when you sell it.