If you don't know what's in your wallet, or how to use what's in your wallet, you're likely wasting money. Gift cards go unused and expire, credit and charge cards are used without strategy, and needed receipts disappear. In fact, financial guru Jean Chatzky claims that American women spend close to an hour a week just looking for receipts. Instead of wasting time searching for misplaced financial items, take an hour this week and tackle your wallet.
Here are some suggestions to help you get started.
Gift cards and store credits
We're heading into holiday season, so take out the store credits and gift cards from your wallet and figure out how you can use them up. If you can put them toward an item that's on your shopping list, great. If you can't, then consider selling or exchanging your gift cards through an online site like CardSwap.ca, which could leave you with up to 90 per cent of the card's value. Or make them available for sale or swap by advertising through your social media network.
If you are carrying a balance on your rewards cards, then take them out of your wallet and leave them at home. These cards usually come with incredibly high interest rates and the interest you end up paying will outweigh the rewards you get. If you're able to pay your balance off in full every month, then confirm you're using the right rewards program. Ask yourself: How much does this card cost in annual fees, are there limits to how many rewards points I can earn, do my rewards expire, and considering there is a rewards card for just about every interest I have, will this program be most beneficial for me and my family? After you choose the right card, develop a strategy to maximize your rewards. I have two cards, but I only carry one with me and I try to use it for every single purchase to maximize my points. It's also helpful to use an online service to organize and track your loyalty cards.
Store Credit Cards
It's the same story with store credit cards as it is with rewards cards. If you don't pay your bill off in full every month, then leave your store cards at home and out of your wallet. Store credit cards and points cards can carry the highest interest rates out there. We get lured into thinking we are going to save up front; however, if we don't pay the balance in full at the end of every month our up front savings are erased by the high interest.
Your receipts should be treated as money, because if you lose them, especially if you've paid cash for something, you're often out of luck when you need to make a return. They tend to take up the bulk of most wallets and yet for some reason we can never find the receipt we're looking for when we need it. Store your receipts in your wallet and make it a habit to slot them into a folder at home once a week. For expensing purposes, a system for tracking receipts is also important. Simple online tracking tools seem to be the best solution. You can record and upload expenses instantly through e-mail or instant message to your financial software or free online accounts.
It's obvious we shouldn't be carrying passwords or personal information in our wallets, but over time, sensitive information can get jammed between pictures of your niece and a business card from someone you can't remember meeting. Store your passwords securely online and, if possible, make a photocopy of everything in your wallet. That way, if your wallet is ever lost or stolen, you'll know exactly what was lost and whom you need to call.
While you're simplifying and taking things out of your wallet, there is one thing I would suggest adding to the mix: some motivation. Cut out or print out a picture that illustrates what you're saving for. One woman I recently met showed me her credit card and on the front she had slapped a small picture of a beach. It was simple but effective. Every time she was tempted to make an impulse buy, she had a little visual reminder of her true savings goal. A messy wallet can be a sign of a chaotic financial picture. Just carry the essentials for protection and for purchasing power.