Cash Control

Published in Telfed online magazine March 2012

Tips for keeping track of the cash – which always seems to slip through our fingers

We've all experienced the following scenario: we withdrew 500 NIS from the ATM, placed the notes in our wallets, and after 2-3 days, the 500 NIS completely vanished from there (except for maybe a few coins…). We strain our brains trying to remember how the heck we spent 500 NIS in 2 days? Let's see... we paid 150 NIS to the kindergarden parents's association, we gave our oldest child 50 NIS pocket money, but what about the other 300 NIS? Oh, some of it went on lunch yesterday but I can't remember exactly how much….OK, let's just withdraw another 300 NIS.

And at the end of the month? If we bother checking our bank statement we discover withdrawals of hundreds if not thousands of shekels, but we hardly have any proof of purchase to connect to that sum.

Many of my colleagues maintain that it's better to use cash than credit cards, especially when trying to cut back expenses. I agree, but only as long as we monitor when and what we buy - no matter how small the expense seems to be.

So, for all of you who want to get some "cash control" into their lives, I listed here a few practical tips which you are welcome to adopt and use. Note that most of these tips are also relevant to credit card purchases.

1. Always – but always – ask for a receipt, also for the most mundane and small purchases (at the bakery, greengrocer, parking lots etc). What to do if you really cannot ask for/get a receipt? See tip no. 5.

2. Once you have the slip in your hand, don't hurry to place it in your wallet. Have a quick look at the slip. Many businesses still print receipts without any details, and even if there is, it might very well be inaccurate or non-discernible, sometimes even the name of the business is different to the its known name. So my tip is – get a pen and write on the slip what you bought and the reason, briefly

of course. For example, you paid 55 NIS at the toy store. Write: 25 NIS – toy for XXX (your kid), 30 NIS – gift for a kid from school.

3. Do place the receipts into a regular, fixed place in your wallet, do not throw or just stash them randomly into your handbag and do not place it in the bag containing the product. They tend to vanish from there mysteriously …

4. At home, use a see-through plastic envelope, place it somewhere near your entrance door or in the kitchen or in any other prominent place in your house where you spend a lot of time. Place all the slips you collected that day/yesterday. Do not wait until you have accumulated dozens of slips in your wallet!

5. Next to this envelope, place a little note book. This will be your "cash without slips" book. At the end of every day, spend 30 seconds writing down all the tiny purchases you made that day. Write the date and next to it the item. For example: 8/12/11: newspaper – 7 NIS, babysitter – 50 NIS, ice lolly for kid - 10 NIS, gift for work colleague – 20 NIS. If it's more convenient, you can keep your expense records using your Smartphone, I personally prefer the note book (update - use an App such as TOSHL for this!)

6. Use the same notebook to keep track of cash you receive. For example, if your parents gave you 500 NIS as a birthday gift, write that down as well (place a plus sign next to the number, to indicate it's an income and not an expense).

7. And for the "big tip" – all the tips above are indeed great, and the actual writing down may reduce the spend a little. But, without implementation of the following tip – you won't really be able to gain control and know on what you spent so much. The tip goes like this: every weekend, monitor the expenses by summing them up, preferably in Excel, according to expenditure items. Do this every week, month-by-month. It's recommended to combine the cash monitoring with general monitoring of your expenses, so you can see your true balance sheet.

8. If you manage your household with a partner – all of the above tips need to be implemented by both of you, otherwise, again, you'll have a partial picture only.

If you have other tips for Cash Control – I'd love to hear them!