When and How to save Receipts

If you have a love hate relationship with receipts, this one’s for you. I personally hate receipts with a passion. They seem so unnecessary. Why do I need record that I bought a cup of coffee? And 99% of the time, I don’t. But 1% of the time when I do need it, such as for a business expense, then I’m thrilled that I have a way to actually find them when needed.

All receipts as I see it, fall into five categories. And it’s good to keep it simple.

TAX DEDUCTIONS
Some receipts you need to retain for tax purposes. Take a photo of the receipt in an app such as Expensify or Evernote, or use a scanner to save them on your computer. Keep the original receipts in a plastic envelope by year. They don’t have to be overly organized since you have them labeled electronically, but some people feel they still need the paper copy “just in case.” If you tend to live out of your vehicle, keep the envelope in your vehicle so you can get the receipts in there efficiently. A small accordion file can be helpful if you need to sub-categorize them. [consult with your accountant as to if you’d need to keep the paper copy or not, and for how long]

RETURNS
Sometimes you need the receipt to make a return. Keep these on a bulletin board or clipped up where you can access them easily. I keep mine on a photo clip. It’s small, so I can’t over fill it, and it forces me to keep them purged. [see photo] Over the Christmas season when I have an abnormal amount of receipts for potential returns, then I keep an envelope in my top drawer until I’m sure all the gifts are going to be kept.

receipts-on-clip

LARGE PURCHASES
If you make a large purchase like a dishwasher or vehicle, or you make a huge improvement to your home, you usually want to keep the proof of purchase. I’d recommend you start a folder in your file cabinet that is for “large purchases” or “home improvement receipts.” Or you can keep the receipt stapled inside the user manual [if you have those organized and accessible].

BALANCING ACCOUNTS
Some people keep receipts to be sure the debits and credits are reconciled. Personally, I think by doing this you are adding extra work to your life. I used to be one who did this, and then as my finances became more complicated, I realized it was adding unnecessary work to my schedule, and with wonderful technology, I can sync my financial accounts with my Quickbooks and eliminate a step. But, some people like to keep exact track. If you’re one of these people who keep them, use an accordion file to keep the receipts sorted by month. Once the account has been reconciled, I’d recommend shredding the receipts [unless you need them for tax purposes].

receipts-folder

ALL OTHER RECEIPTS
Any other receipts…you don’t need to keep. If you buy a candy bar, is there any reason you would need to keep the receipt? [again, consult your accountant to be sure]

AND! don’t shove receipts in your purse or bag to never be recovered and creating clutter that will eventually overwhelm you. Either deny a receipt at the store or discard it in a timely fashion. I am overly cautious about my receipts and I like to shred mine myself because I fear fraud [which is probably a false fear], but most people don’t and toss them in any trashcan right away. And you surely can too.

I’m not a financial expert by any means, so I tell people to be sure they know they legally don’t need the receipts. My job is to challenge you to be sure you think before you keep. We are engrained to need to save receipts for some reason, but I dare you to ask, “do I really need to keep this?”

 

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