Save or shred? A guide to avoiding identity theft

In addition to reducing the clutter, protecting against identity theft is an excellent reason for shredding lots of the paper that many Americans have stashed in filing cabinets and shoes boxes.

"Identity thieves can't find documents you have destroyed. Destroying documents with your personal information reduces the likelihood of becoming an identity theft victim," Lisa Weintraub Schifferle, an attorney with the Federal Trade Commission's Division of Consumer and Business Education, writes in a blog post.

After paying credit card or utility bills, shred them immediately. Also, shred sales receipts, unless related to warranties, taxes, or insurance. After a year, shred bank statements, pay stubs, and medical bills, barring some unresolved insurance dispute.

Wondering what to keep? The FTC says documents related to major life events should be saved and kept in a securely locked place. That would include:

It's also a good idea to keep tax returns forever, but related pieces of paper like pay stubs can be shredded once checked against a W-2.; home improvement receipts are good to keep until one's home is sold, as certain expenses could cut your capital gains tax, and tax-related receipts and cancelled checks should be kept seven years, as the Internal Revenue Service has three years to audit you, and up to seven under some circumstances.

(If you're unsure what tax records to keep, consult an accountant or call IRS Taxpayer Assistance at 1-800-829-1040.)