Getting receipts in order

Before I start, let me reiterate again that I'm not a financial advisor, at all. I'm just a mom who helps manage her family's money. I love finding new ways to make and save money, and those ways typically require being organized with our finances.

To me, being organized with our finances means knowing where my family's money is coming from and going. Today, I'm just going to chat about tracking where the money is going. It's hard to know what the money is being spent on if we don't track it. There are many tools you can use to track your money. We decided to go with a computer program called Quicken because with just a few clicks of the mouse button, we're able to download all of our financial information from our banks to our computer. Talk about a time saver! Of course I also know someone who sticks with keeping track of their finances simply using a notebook. I suggest choosing a method that works best for you and your family so you'll be more likely to stick with it.

Have you been collecting your receipts in one location this last week? Whether you use cash, check, or credit cards, you receive a receipt with all of your purchases. These receipts will allow you to track your expenses. Before we can create a budget to help keep everything in order, we have to know where our money is going. Some people wait until they receive that month's credit card or bank statement to see where their money went. We prefer to take a more proactive approach.

Each day, or at least once a week, I record my (and my husband's) spending in Quicken. We have broken our spending down into different categories such as auto, books, clothing, children, education, entertainment, groceries, medical, etcetera. The computer program then calculates our spending in each of the categories for us. Bonus! If you prefer the notebook approach, simply make charts with columns listing your spending categories. If you prefer, you could also use one page per category. However you choose to track your spending, the important thing is that you know where your money is going. This can take a little time, especially when breaking down receipts into the different categories. It will be very useful later, though.

Once you've recorded your expenses, everyone has a differing opinion on what to do with those receipts. Some people choose to hold onto them in case they need to return something, refer to a receipt later, or "just in case". Others immediately throw the receipts away except for on the big-ticket items. Yet others choose to do a mix of the previous two methods.

One note on the receipts. These can add a lot of clutter if you don't keep them in order. Be sure to select a location such as a small box or drawer to save your receipts until you get a chance to enter them into your finance tracking system. If you're planning on saving your receipts, have a plan for how to file them away. A simple accordion file can do the trick if you want to save the receipts by month, category, or even by what the item is. We prefer to file by month since we can look in Quicken to see when we purchased an item to help us find the receipt.

What does your system look like? What has or hasn't worked for you in the past? Do you have a hint or tip with a method that has helped make this process easier for you?

This week's financial task: choose and start a system to help keep track of the finances and decide how to keep receipts from becoming clutter