Ohhhhhh gawd one more piece of paper to have to figure out, act on, and file is gonna break my achin’ back! Yesterday afternoon I was trying to figure out how to organize the usual complicated mess before handing it over to The Accountant from Nirvana, who offers to take on the migrainish bookkeeping. Obviously, the less mess for her to have to plow through, the fewer hours it will take her to beat it back. Hence: decomplication.
So much paper comes pouring into my house that often I just can’t keep up with it. It piles up like dust on the Plains until finally I’m forced to deal with it, and that dealing can take the better part of an entire day. Yesterday, I thought if only i could find a way to cut the number of transactions and the number of pieces of paper i have to screw with, maybe it wouldn’t take half my lifetime to keep this shit under control…
One spring that feeds the flood of papers is the charge cards. Specifically, the AMEX card. Costco’s American Express card is one of America’s premier kick-back cards: almost every charge racks up a few pennies or a few dollars toward the annual “rebate,” which in my case goes directly into savings. Because I charge everything on the AMEX card and then pay it off at the end of each month, some years that kickback has amounted to three or four hundred dollars. To make that happen, though, entails snowflurries of charge slips, each of which has to be entered in Quickbooks.
Most of these small charges, some as small as a couple of bucks, occur at a limited number of retailers: Costco, Safeway, Costco gas, AJ’s (a local purveyor of fancy groceries and the best coffee beans in town).
What if…? What if I were to buy cash cards at the places where most of my charges take place? You can buy cash cards at Costco with which to purchase gasoline and groceries. Ditto Safeway: give yourself a gift card. Same at the local upscale AJ’s. A person could pay for these things with the richly endowed AMEX card, thereby preserving the coveted kickback.
Wouldn’t it make sense to buy gift cards or cash cards to cover purchases at the most-frequented retailers, thereby consolidating 87 gerjillion receipts into three or four?
If said person then paid for purchases under about $50 with cash, wouldn’t that also get rid of a lot of ditzy little receipts to keep track of?
Then how much would be left to charge on credit cards, track, and organize monthly payments for?
Hm.
Averaging charges in various categories over seven months, I discovered that typically I’ve been spending about $55 a month at AJ’s, $300 at Costco on groceries and household goods, $95 on Costco gasoline, $120 at Safeway, and around $160 on small sundries. On average, large planned or unplanned bills can come to as much as $370 in any given month.
What if the only things that went on the charge card were gift or cash cards and large bills? And all the little stuff were paid in cash?
This would hugely change the budgeting scheme. Instead of $1100 a month to be charged on the card and paid off at the end of each month, things would look like this:
Biggest drawback: it would require me to traipse to the credit union once a month and get actual cash, of all things…
On the first day of each budget cycle:
1. Drive to the credit union; withdraw $160
2. Drive to Costco: Buy $395 Costco cash card ($95 for gasoline; $300 for in-store purchases).
3. Drive to Safeway, get $120 Safeway cash card.
4. Drive to AJ’s, get $55 AJ’s card.
Manage funds accordingly.
This would consolidate all the charges for groceries, cleaning goods, personal care products, and household stuff into three charges — Costco, Safeway, and AJ’s. Gasoline and some clothing would also be comprised in the Costco card. There would be no reason to itemize every single stupid little charge in these categories; instead, all that would be noted is the cost of an estimated month’s worth of charges, to be paid with a cash card. Same would be true of the ditzy little bills, 50 bucks and under, that would be paid for in cash.
The only bills requiring serious itemization would be bigger-ticket items such as major car repair bills, gifts, dental visits, and the like.
Right there, dozens of scraps of paper, direct to the trash! Or at least not stashed in a file folder or envelope to be inflicted on the (expensive!) accountant.
Today, speaking of major bills, I have to leave my car at the shop for a brake job, so I won’t be driving around buying cash cards and extracting cash from the credit union. But tomorrow…
I must be missing something because I don’t understand why putting everything on the Amex doesn’t make it even easier to track purchases. Can’t you export transactions from Amex and then import into Quicken? If you can’t do that natively with Amex, what about using Mint as the “go between” where you could export the transactions and them import them into Quickbooks?
I also put everything on cards I possibly can so I can get cash rewards (of course I pay the cards off every month), but I have them connected to Mint where I can reconcile transactions daily, if I so choose. Yes, I usually keep paper receipts, too, but I stick those in a small accordion file divided by month and only use them for back up and documentation for taxes. I usually only end up spending an hour a month reconciling transactions and putting pertinent receipts into my tax file. The rest of the receipts just sit in the small accordion file for the year, and I clear them out when I need that monthly slot again.
Well, my problem is a surfeit of passwords and websites to have to dork around with — as we speak, the list of secret codes is NINE single-spaced pages long, and I’m extremely tired of having to learn new software. I’ve resisted having to deal with credit-card websites, so what I do is file the receipts; get a paper statement mailed to me, and enter the transactions manually into Quickbooks from the statement.
This forces me to look carefully at each transaction to be sure it’s legit, which is a good habit. But it’s also time-consuming and, because of the sheer bulk of transactions, prone to the occasional screw-up.
Also, it’s worth noting that when I complain about the flood of paper, the charge card bills are a small part of it. We also have the waves and waves of incomprehensible paper that flow in from Social Security, Medicare, the Medigap insurer, and the part D insurer; the investment statements, the bank statements, the utility bills, the homeowner’s and car insurance bills, tax paperwork, and on and on. Every piece has to be opened, unwrapped, figured out, acted upon, and filed. If I don’t stay on top of this junk, within two or three weeks I can end up with an eight-inch-high stack of paper to plow through.
I share your pain with all the paper work and the “fondness” for American Express. Your plan wouldn’t work for me as my Amex gives me 6% cash back on groceries…3% on gas…1% on everything else. I really like the breakdown provided by my Amex card and their customer service …second to none. It really amazes me how much paperwork we generate…and we’re not even fighting Medicare…Social Security …or the “gap” insurance people yet!!! If you come up with a short cut…count me in…
So, the question is, how does AMEX regard a Safeway gift card? Obviously, it’s going to be used to buy groceries, household goods, and personal care products. Is the kickback 1% (because the card itself, after all, is a piece of plastic, not food), or is it 6%?
And how does it “see” a Costco cash card? I think you just buy a cash card and use it at the gas pump, rather than buying a separate card for gas purchases. The same issue would hold for Costco purchases: some would necessarily be groceries, but others would be “everything else.”
If you have your Amex acct online, you can have the bills sorted by charger, vendor, etc. You also get an end of year consolidated statement. Seems worth learning another password for the time-saving features.
If you’re interested in doing this, you should look into the discount gift card sites. There are a ton out there and you can buy gift cards at what is sometimes a sizable discount. I’m not affiliated with any of the sites, but using them has certainly made a difference in my budget. One of my favorites is http://www.giftcardgranny.com/
It’s an accumulator site, so you can see what deals assorted other sites are running without needing to open a dozen different webpages. For example, last night I needed to get some cat food for my monsters, so I went looking and found that several of the sites were running a 20% discount on gift card for the supplier I use. I got a $200 gift card for $160. That’s a high example – usually the discounts are somewhere in the 3-5% range, but every penny counts.