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The purpose of a paper shredder is to prevent potential criminals from seeking and finding your personal financial information on any financial documents that you might throw away. This could include monthly bills, credit card statements, old tax returns, business receipts or just about anything else that you might discard that contains information that pertains only to you. Going through someone’s garbage might seem to be a lot of trouble, but people do it all the time. By purchasing a shredder, you can effectively destroy any such documents before throwing them away. Once they have been shredded, they can no longer be read.
You should not throw all such documents away, of course. It is generally a good idea to keep some financial documents for up to seven years for tax purposes. You never know when the Internal Revenue Service may decide, out of the blue, to audit a tax return you submitted three or four years ago. As such, you should keep business receipts, earnings statements, W-2 forms and any other similar documentation until such time that you can be reasonably sure that you won’t need them anymore. After that, you can shred them and throw them away.
Shredders are not particularly expensive; you can buy small models for as little as $30 or so. These are so-called “straight cut” shredders; in theory, anyone with all of the pieces could put the strips of paper back together again. For a little bit more money, you can buy a “confetti” type shredder, which reduces the documents to much smaller pieces.
Of course, shredding documents is just one part of the prevention process for identity theft. You should also guard your information when shopping online and watch out for scams from telemarketers and e-mailers engaged in phishing attacks. The criminals who would steal your financial information are going to use a multifaceted attack, so you should use a multifaceted defense.
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