Tracking Your Money

Page 2

To do list

• Set up a foolproof system for retaining all receipts and ATM slips.
• Make provisions for recording transactions with no receipt.
• Practice the new habits you'll need to develop to make your system work for you.
• Choose one place to collect your various receipts until it's time to enter them into the income and expense spreadsheet you'll create in the next section.

Building a Fence to Snare Every Last Scrap of Your Financial Information
What a relief it will be! Soon you'll have a reliable method for holding onto a record of every transaction long enough to get it into the tracking document you'll create in the next section.

Here's a problem that our prehistoric ancestors could relate to. Say you're a shepherd. It's getting to be dinner time, you're anxious to get home and put your feet up in front of the fire, and you look over your flock and think, "Am I missing one?"

Millions of years later, we get that same sinking feeling about our wayward receipts, check carbons, and ATM slips: the modern-day herd we each must tend. As sheep are notorious for wandering off to explore little outcroppings halfway down a cliff, our gasoline receipts seem to have the same fascination with that knuckle-scraping gap between the car seats. They say paper comes from trees, but behaviorally it has more in common with livestock.

So, how can you keep your flock from straying? Build an escape-proof fence in the form of a receipt-collection system that covers every possible scenario.

Your mission is to capture and hold a record of every single transaction you make until you're ready to process them. Your fence, so to speak, will be the collection of methods you use to make sure none of these rascals gets by you.

Changing Habits
Congratulations, you're already halfway there! Awareness of the need for change is half the battle. Now extend that awareness to attentiveness of your day-to-day behavior. Consider these questions as you prepare to build your fence:

• What types of transactions do I have? – Is it mostly bank-card purchases? What about ATM or drive-thru withdrawals or deposits? How often do you spend cash?
• What do I usually do with receipts? – Do you stuff them in your pocket or purse, throw them in the shopping bag, or stash them in your car visor or up on the dashboard? If you had to find a particular receipt, what are all the places you might think to look?
• What do I think I should be doing with receipts? – Is there a bowl or in-box that you always intend to collect your receipts in (even though that doesn't always happen)? Keep this spot in mind: It will probably become the center of your receipt-collection plan – the corral around which your fence is built.
• What do I always seem to lose? – You probably have at least one type of transaction that often gets lost. Think about why that happens. Is there something about this transaction that makes saving the record or properly storing the receipt inconvenient? My "problem sheep" are pay-at-the-pump gas receipts (I'm in a hurry, it's cold out, and I stuff the receipt in my pocket instead of my wallet) and Amazon.com purchases (I don't always remember to print out the onscreen receipt). Figure out which items seem to fall through the cracks and why, and you can mend a big hole in the receipt-corral fence.
• What if I don't get a receipt? – What happens if you write a check or use your bank card and for some reason they can't give you a receipt? Do you have a backup plan for capturing that transaction? This is another reason that pay-at-the-pump gas receipts are a problem for me: Sometimes the receipt printer is out of paper, and if I had time to go inside and get a copy, I wouldn't have paid at the pump in the first place!

Pay attention to what you do every time you handle money. Do you get a receipt or make a record of every transaction? If not, what gets in your way? What can you change to eliminate these obstacles? What can you do as a last resort if your regular system doesn't work, and how can you trigger yourself to engage that last resort?

When you observe yourself in a variety of transaction situations, you'll begin to recognize the ones that wreak havoc with your money management. Practice compensating for these with some sort of workaround. For example, if I'm tempted to grab that gas receipt and run, I ask myself why: Am I freezing? Fine, get in the car, start it, and take a second to put the receipt where it belongs. Was the stupid printer out of paper? Scribble the date, amount, and card used on a scrap of something, even a blank space on another receipt already in my wallet. Am I in a hurry to drive away because some shady character is lurking nearby? Okay, engage the last-resort receipt-handling plan: Get in and go, but keep the receipt or a scrap of paper to make one in my hand until I get to a red light or my destination; then put it where it belongs.

With the Amazon.com purchase problem, I added a new behavior to try to reinforce the one I'm supposed to be doing. Since I couldn't rely on myself to always print out the receipt and put it in the container until the next day I balance my accounts, now I open QuickBooks as I'm finishing the Amazon transaction – right at the point where I'm smiling and thinking, "Cool! I should have that book in about two days!" – and I key in the purchase right then and there.

You, too, can build a set of adaptive processes like these. Instead of chastising yourself for losing receipts or forgetting transactions, just think, "Okay, so this is a glitch for me, but it doesn't make me a bad person. Now how can I solve this problem?" The best solutions anticipate our quirky humanness and help us to work around it.