While junk mail can be recycled, many other household and business documents contain important information that needs to be saved. The problem with having too much paper is not being able to find what you need when you need it. Anyone who has spent hours digging through file cabinets looking for an old password can attest to this. But you should also consider the fact that your vital documents, like insurance policies, can be gone in a flash if you’re struck by a fire or flood.

Here are a few ideas to help you become more organized in the New Year:

* Reduce your incoming flow of paper
Sign up for electronic billing and opt out of receiving paper bills. This reduces the amount of paper coming into your home and makes it easier to manage as well as having a positive effect on the environment. Paying bills online can also save time. It’s easier to see at a glance how much you’re spending and you can quickly find old invoices without digging through piles of paper.

* Digitize important papers
For critical documents such as legal records and receipts, consider investing in a home scanner with a document feeder. Using software such as DYMO File, you can easily scan and file all your important documents electronically (www.DymoFile.com). DYMO File also lets you search for a document using any word within the file making it quick and easy to find what you need. Make sure to store valuable original documents in a fireproof safe or a bank deposit box.

* Protect your identity
With sensitive documents on your computer, it’s important to set up a password in order to access these files. Your password should be at least six characters and should include both letters and numbers. Don’t use obvious passwords like addresses, phone numbers or your name. Remember to shred any mail that contains personal information.

* Digitally capture contact information
Using a system like CardScan, you can scan and electronically read all your business cards from home service companies, your accountant and your dentist as well as business colleagues (www.CardScan.com). When you receive an e-mail with an automatic signature, you can “drag and drop” it into your CardScan software so all your contact data is in one place. You can also sync the information with your smart phone for on-the-go access to all your important contacts. You can even safeguard your contacts using CardScan’s free online back up service.

* Back up your files
Once your paper files are converted to digital information, don’t forget to back them up. Invest in a separate hard drive and regularly back up copies of all important files. You can also use automated programs such as the “Time Machine” feature on a Mac. Backing up files also secures your personal music, video and digital photos — files that many consider priceless.

* Look for even more paper to digitize
Don’t stop at just business and critical personal documents when you can digitize even more household paper. Scan and store your children’s report cards, family photos and kids’ art work. You can always keep the paper version if you’d like, but your digital scrapbook is there just in case.