Financially Organized: Receipts
In the last installment of Financially Organized we organized your bank statements. These gems contain the bulk of your financial information but they don’t list all the information you’ll need. Unfortunately, we have to keep receipts too. Those pesky slips of paper litter our wallets, purses, homes and lives.
Your receipts contain details of the transactions summarized on your bank statements. They are absolutely necessary in the event of an audit’”your bank statements alone will not suffice. Your receipts provide item descriptions, the dates and amounts of your purchases. They also contain information about how you paid. Which statement will it show up on? Was it a cash payment or a debit/credit card transaction?
Keep track of all your money’”in and out. Have a record of everything you spend and everything you earn (whether it gets deposited or not). This sounds tedious so I make a game of it. I call it ‘œCapture the DEAN’. DEAN is an acronym for date, expense, amount, and name. Those are the four elements which make a receipt a valuable record.
I envision each receipt as a dean from my school days. I’ve designated a box in our home for all our receipts. If I see a ‘œdean’ lying around, it goes in the box. Then when I reconcile our bank accounts, I check to make sure the receipt has been entered in the computer. I stamp them to indicate the date they were entered. Since I reconcile and check the receipts frequently, I simply file the receipts by month. This way I have 12 folders at the end of the year and can quickly find receipts when I need them.
Keep your receipts in a way that works for you. There is no right or wrong way for this one. Save them by expense type, say all auto receipts in one folder, telephone expenses in another. Or in shoeboxes, one per quarter. Do what it takes to make your receipt keeping as easy as possible.
TIP: $$$$ If you are in doubt, save anything with a dollar sign on it! $$$$
Practice this week. Get in the habit of keeping your receipts organized. Gather all your receipts and set up a system to organize them. (This is one financial task it IS ok to do in front of the TV!)
With all your bank statements and receipts consolidated and organized, how do you manage the data? In the next installment of Financially Organized, you’ll learn about keeping electronic records. Technology has made the lives of financial professionals easier. It can work wonders for you too. Check back to continue getting Financially Organized.
Allison: These are excellent tips, especially for the self-employed or if you happen to be a perma-lancer. “Capture the DEAN” is a great concept. I’ve got some capturing to do between now and the end of the year.
I’m thinking of stapling or paper-clipping relevant receipts to my bank and credit card statements. I’d have to print out my credit card statement to do this. And I’d attach things I paid for with cash to my bank statement.
Then I could store everything in file folders or a notebook.
Or maybe I’ll just keep doing what I’m doing–save receipts long enough to record my expenses and balance my accounts, and then attach relevant receipts to warranties which I store in a large envelope box.
It’s nice to have receipts around for a while in case you need to return something or, so I’ve heard, in case something you just bought goes on sale and you can get an adjustment. Any other reasons, anyone?
I keep track of purchases in a homemade checkbook register-like thing with columns for different budget categories. As I buy things, I subtract off what I pay and can see how much I have left, so this is sort of like an envelope system. This way I can also have a record of purchases that don’t come with a receipt.
Any other techniques for dealing with receiptless purchases? Make your own receipt?
My boyfriend keeps all his receipts in a paper lunch sack, one lunch sack per year. Occasionally he digs through it when he wants to return something.