How We Track Expenses - The Lifecycle of a Sales Receipt In Our Household
Since most of our purchases involve either cash or a debit card, it is of upmost importance that we save our receipts for financial tracking. We treat our finances like a business - expenses must be accounted for and tracked. We use Quicken to manage our finances and the sales receipts are a focal point of this financial management system. We’ve developed a fairly easy system for storing, recording, saving, and discarding all our receipts. Here is a step-by-step process of how we handle sales receipts in our household:
1. The receipt is saved when it is generated. For example, when I purchase something then I immediately take the receipt and place it into my wallet. When I return home, the receipt is removed from my wallet and placed into the “to be posted” slot in our filing system.
2. Sales receipt information is entered into Quicken. During the weekly posting to Quicken, the receipt is removed and the information from the receipt is entered into Quicken including date, place, amount, and appropriate category of expense. Whomever does the posting to Quicken initials the receipt, and the receipt is then stored in another file labeled “receipts posted”. The receipt will stay in this file until we see that it has cleared the bank (if a debit).
3. Receipts are checked against monthly bank statement. We reconcile our bank account when the monthly statements come in. All receipts that have cleared the bank are then removed from the “receipts posted” file. We review these receipts to see if we need to keep any for a longer period of time (i.e. if we think we might return an item, to substantiate a warranty, or for tax purposes). Otherwise, these cleared receipts are shredded in our cross cut shredder. Any receipts that have not cleared the bank stay in this file for now.
4. Receipts that are kept from item #3 are then filed in the appropriate files. These include receipts where we might return an item. Many stores now have a policy in place that they will not refund or even exchange merchandise without a valid sales receipt. Since most returns are handled within a week of purchase in our household, these receipts usually have not even cleared the bank when they are done. However, we have a file for those receipts that need to be kept until the return period has expired. We also have a folder where receipts related to warranties are kept. These receipts are stapled to the owner’s manual or operating instructions for the item that was purchased and stored in a file that we’ve titled “owner’s manuals and warranties”. Tax related expenditures are stored in the current year’s tax file.
I was never disciplined enough to keep tracking all the expenses. I started this process last August and only lasted for about three months, then eventually gave up after I saw the expenses of the three months were almost the same. It’s too just tedious. I promised myself to keep tracking at the beginning of the year, but didn’t really pick it up. As a result, I don’t do budgeting as well, :((.
[...] Not Made of Money shares their experience on how to track expenses [...]
for steps 2 and 3, i use the weekly download from my bank to match my reciepts. data entry is limited to the purchase category. my weekly cash purchases are usually limited by my weekly allowance and allocated to personal small ticket items (burger king / vending machines / etc.) shopping with my credit card is planned in advanced to avoid overspending. shopping with my allowance helps to avoid splurging since i need this to last the week.
I have used Quicken off and on for years. It’s the 2000 version. Like Sun, I planned to keep up with the year’s expenditures but didn’t get past February. Keeping the checkbook balanced is enough for a busy mom.
After Ken’s post about downloads from your bank, I decided to delve deeper into Quicken. Back when I was introduced to Quicken there wasn’t much “on-line” activity in my life; however, my 2000 version told me all sorts of options to get into. After talking to my bank, etc., I am looking forward to putting it all into motion. CAUTION–Quicken won’t work with downloads with my bank when it’s way too out-of-date!! I’ve had to purchase a $24.00 2007 version of Quicken and can hardly wait to receive it, load it and download from my bank. The major steps that this knocks out is awesome! Just categorizing will be simple! Our cash purchases are minimal, so almost everything will be accounted for with the bank download. Thanks Sun, Ken, and Not Made of Money!