Getting a handle on your finances takes some time, but is an inexpensive way to cut down on household expenses. When bills are accessible, it is easier to pay them on time and save money in late fees or rush shipping. When receipts are organized, broken items can be returned or serviced for free under a warranty—if you can find it! The savings can really add up.
Set up a system As soon as you get the mail, put the bills and bank statements in their place—preferably somewhere above arms reach of little ones. Don’t lay your bills down anywhere else, lest they get lost or moved by another family member. I use a letter sorter which has enough space for a few blank business envelopes, stamps, rolls for coins, and a pen. You could also use an expandable file folder with a sufficient number of pockets for your filing system.
Keep debit and credit receipts Collect your debit and credit receipts in your wallet or in your filing system. Enter them regularly in your checkbook, Quickbooks, or whatever system you use. Keeping an accurate balance of your finances will help you avoid overspending. Clearly mark the receipts that have been entered. File receipts necessary for warranties, stapling them to the user’s guide or other warranty information. We file all other receipts by month in business envelopes, in case something needs to be returned.
Print receipts for internet transactions Internet purchases can sometimes get lost in the shuffle of daily and weekly expenditures. Print out receipts from internet purchases and file them with your bills and bank statements. Record them regularly so there are no surprises at the end of the month.
Pay bills regularly This seems like such a simple idea, but it is so easy to put off paying the bills until next week and then you realize that you have a bill due tomorrow! Paying bills regularly saves money in late fees and overnight shipping. If you need to keep a record of a paid bill, record the date and check number on the stub before filing it in your filing system. (I’ll save that one for another article…)
Keep a file for warranties and manuals Create file folders for warranties and manuals of products that you purchase. Staple the receipt to the manual so you have all the information for the warranty. You can even mark your receipt if it was paid by credit card because some credit cards double the manufacturer’s warranty. Also, record the serial number, especially for electronics. When some of our personal items were stolen, he mentioned that he would be able to trace items if he had a serial number. Now I record those on the cover of the item’s manual.
Technically, I have more than one warranty file: one for outdoor items such as the lawnmower and tools, one for kitchen tools and appliances (toasters to stoves), one for electronics (stereos to phones), one for everything else luggage), one for jewelry and one for kids furniture and toys. My girls have their own file folders for items that they own. A little bit of time could save a lot of money down the road.
Monitor bank statements Be sure to balance your checkbook, double checking all expenditures, automatic withdrawals, and deposits. Banks sometimes make mistakes. Once out bank direct deposited my husband’s paycheck TWICE. We were only looking at the bottom line and didn’t catch the error for two months. It was a blow to our budget when the bank withdrew the second deposit from our account! More importantly many banks are changing their fee structure and charging for various services. Know if you’re being charged, what for, and how much. Shop around and see if you can find comparable services for less.
Use cash Whenever possible, use a cash system. Withdraw money weekly or biweekly for gas, groceries, entertainment, or clothing and store them in separate envelopes. Before you make a purchase, consult your envelope to see how much money is available for your purchase. This does require an amount of self-control not to spend over the limit or spend on items other than the designated categories. You may also find it helpful to save receipts for cash purchases so that you can accurately budget for the future.
Whether you use cash, check or credit, be sure to keep receipts you might need for returns or warranty purposes. When I purchase clothing or shoes, I keep the receipts for at least one month in case there is a defect in the product.
Make a budget—and follow it I saved this one for last because it is a little intimidating. Making a budget does take some time and sticking to it takes a lot of self-control, but spending only what is budgeted is guaranteed to save you money. There is no need for me to detail the process of making a budget since there are so many other organizations that specialize in budgets and finances. Years ago we used Larry Burkett’s budget system to get out of debt. (It’s now called Crown Financial Ministries.) Dave Ramsey’s Financial Peace University is another successful system for eliminating debt and living within your means. Which one is best? Well, it’s like a famous body builder once said when someone asked him which exercise equipment was the best. His reply was, “The one you use.”
Sometimes life passes by so quickly that we easily fill our days meeting the urgent needs without giving thought or attention to looking ahead. Take some time to organize your finances, evaluate where you are and set some goals for where you want to be. Not only will it improve your bottom line, it will be time well spent.