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Saturday, January 4, 2014

Organizing Receipts

My purse used to be out of control. I had receipts everywhere. I have since solved that problem, and with so many people resolving to spend less this year, wanted to share my organized solution with you.

1. Have a dedicated place IN YOUR WALLET for receipts.

Remember that I bought a wallet a couple of months back?

This isn't just any wallet. It has a labeled, dedicated pocket for receipts.

Oh, I had tried dedicating a spot in my purse - rather than my wallet - for receipts, but it didn't work because I take my wallet out of the buggy or at a restaurant table to pay my bills. My purse stays in the buggy (often under a load of groceries) or on the chair next to me. I thought I could be self-disciplined enough to put things in my purse, instead of shoving them in, but alas, I was mistaken. Also, I never could remember which location was dedicated to receipts when I switched purses.

Now, I put my receipts in my wallet without thinking about it, since they have a labeled home and it's very convenient.

2. Do NOT keep all receipts.

I keep most receipts. However, I purge any that meet all of the following criteria:

*are already written in my planner,
*are for something non-returnable, like food or gas, and
*are not tax deductible.

3. Have a place after each month in your planner to write down spending.

After my monthly and weekly pages each month, I have a place where I log my spending, much like one would enter balances in a checkbook. I call it my expense log.

My husband and I budget each month by deciding what we have to spend on fixed expenses (electricity bill, mortgage, taxes, etc.) and subtracting that from our expected income. The remaining number minus the amount we want to save (this year, we are subtracting 4%)  is our budget for flexible expenses, which is basically everything else - food, clothes, entertainment, vacations, charity, gas, traffic tickets, etc.

In the case of the example above, our January budget is $3,702. Okay, $3,702 is a lot of money. Most months are more like $2,000 for flexible expenses. Bills like car insurance and other big, irregular expenses, just don't happen to be due in January. This means we can probably replace some broken furniture this month.

I round all entries up to the nearest dollar, which results in a small amount of additional savings each month.

Whatever is left at the end of the month goes to pay our highest interest debt.

4. Have a place to file receipts that have been entered in your planner temporarily until you can file those receipts at home.

Processing receipts, including taking them out of my wallet, writing the amount in my planner, and tossing those that meet the tossing criteria above, is something that I do when I have extra, found time. For example, I work on this while parked in the carpool line, waiting in the doctor's office, or watching television at night. If I am away from home, I need a place to hold the receipts that have been processed. For a temporary home, I simply hole-punched an envelope.

I place it right next to the expense log.

5. Have a large enough file at home for filing a year's worth of receipts, plus long-term receipts.

I used to use this coupon folder. It was way too small.

Instead, I bought a large index card box and some blank, tabbed index cards.

I use one tab for each month.

I have a special tab for receipts for furniture, appliances, or expensive electronics, since many of those things have more than a one year warranty. I call those long-term receipts.

I also have a tab for receipts that might be tax deductible, like donations to charity or receipts that I used for my business (very few of those, this year, since I am not doing much lawyer work). Those are purged once a year, when I put them in my tax folder to send to my accountant. They will live in my "Taxes 2013" folder for the next 10 or so years.

TIP: If you run a business, have two boxes - one for business receipts and one for home.

6. Each month, when you file your processed receipts, toss last year's receipts.

The first time I process any receipts for January 2014, I'll toss January 2013's receipts in the trash. In my state, it's illegal to print the entire credit card number on a receipt, so there is no need to shred them.

7. Write a reminder in your planner to process your wallet.

In my case, the note is circled (because it repeats every few days, so when it is done, the circle reminds me to reschedule it in about a week) and says, "wallet."

That's it. Seven steps that are simple and will keep your receipts, and your budget, under control.



yezenia said...

I struggled with receipts too. Now I have a pocket ringed binder as a wallet and I have a pocket for different types of receipts and coupons. I love it. I agree with you that it's easier to keep consistent with filing your receipts in the right spot of that spot is where you're dealing with cash and cards. I do need a slot for long term receipts though, thanks for the idea!

Anonymous said...

I have a file for my tax receipts. I also file receipts in a home inventory binder. Monthly bill receipts go in a coupon type file. Store receipts now go in my wallet(thanks to reading your blog) where the checkbook should be. I don't carry a checkbook anymore.

Anonymous said...

Awesome post. Thanks for the receipt filing/planner ideas. I am loving the file master wallet, but still looking for a purple one like yours.

Sandra Tirado

Lavender Life UK said...

You read my mind! I was just thinking about to ask you more details about your budget system. Thanks a lot!!