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The Life Cycle of a Purchase
By Dawn and Daniel Roth
If you feel like you never have enough money, this article
is for you. You will be amazed at the extra money you discover
with a little help and some discipline. The reason you feel
this way is due to a phenomenon called "blind spending."
The following steps will help you find more money in your
current budget. Consider it a raise you give yourself.
Step 1-The Truth. You admit you have no idea
where your money is going, so now what? You must understand
that each purchase has a life cycle you are responsible for
Step 2-The Sale. Many believe that the sale
is the end of the purchase cycle. This is not true! It is
only the beginning. You have traded your capital for a product
or service. That decision creates new responsibilities.
Step 3-The Receipt. Tossing or losing track
of this slip costs Americans billions. Can you afford it?
The receipt can bring great joy and avoid major sorrow. For
specific answers on how long to keep receipts or other financial
questions, take advantage of Squared Away's unlimited communication
monthly online consulting for $60.
Step 4-The Record. You must record purchases
just like you do with checks, ATM withdrawals, or deposits.
Categorizing helps you be aware and on target for spending
goals. Each receipt represents a debit that needs to be accounted
for. If you resent having to keep track of purchases, you
have uncovered one reason for negative cash flow.
Step 5-The Reconciliation. The official statements
sent to you by institutions you do business with are important
in maintaining accuracy. If you have not found a way to successfully
make reconciliation a habit, contact a professional organizer.
Your money is too precious to throw away needlessly. When
you receive a statement of from your bank or credit company,
carefully compare it to the record of your transactions and
spending activities. This ensures that your money is not "leaking"
out of your account due to others' errors.
Step 6-The Balance. Finding errors and correcting
them is the step most often missed in the life cycle of a
purchase. If you make an error (big or small) that is corrected
within a month, no harm is done to your credit and you get
feedback about what is not working with your system. If the
bank or lender makes an error, you can lose lots of money
by not catching it, missing the action date, or paying fees.
Mindful spending includes good decision making leading up
to a purchase as well as accepting the commitment to do the
paperwork necessary to keep your financial affairs in good
standing. If you feel this costs too much time, decide how
much it costs you to spend and just forget about it.