Wednesday, February 20, 2013

Floss One Tooth

After the death of my father in law, my mother in law asked me to balance their checkbooks. It took about two minutes to balance my father in law’s checkbook. It was up to date and error free. The same could not be said about my mother in law’s checkbook. It was a mess. It was full of errors and oversights. After several hours of effort going back through six months worth of statements, I gave up. While I found a lot of errors and missing checks, I could not account for something like $63.00 in discrepancies. I entered a line in the check register for the missing amount. Under transaction description I wrote error. My mother in law could not believe her checkbook was in such bad shape. She never had to worry because my father in law consistently deposited more money than she spent, leaving her with an unusually large balance to absorb any accounting irregularities.

A great deal has been written about the careless use of credit cards. In the wrong hands they are truly weapons of mass financial destruction. However the careless misuse of a checking account, particularly with the use of a debit card for small purchases, can lead to a lot of pain. I have heard stories about the $40.00 latte from angry debit card holders. That would be $5.00 for the latte and $35.00 for overdraft “protection” fees. Al Capone didn’t make a fraction of what the major banks realize in profits from the protection racket. U.S. Banks are raking in $31.5 Billion a year in overdraft fees as of June 2012!

This is a real problem.

If it takes too long to straighten out your checkbook at the end of the month or if you have never balanced your checkbook, try the floss one tooth method. I have seen this in a couple of different places. Evidently it is an old idea. If there is something you need to learn how to integrate into your life that you just can’t stand, start small. No one could complain about flossing one tooth after brushing. Once you are successful with this comical little step, one tooth becomes two teeth until the habit is fully established.

Instead of making balancing the checkbook a feared ordeal, begin small. Use duplicate checks. For debit card purchases; save all your receipts for that day. Men put those receipts in your wallet. Women keep an envelope in your purse for your receipts. They will get lost in the clutter found in most purses. At the end of the day, say first thing after dinner sit down at the computer or with your smart phone. Call up the charges for the day, match them to your receipts and check copies, enter the information into your check register, recalculate your balance, and your done.

This practice will not take you longer than 10 minutes on most days. As you establish this kind of habit you will invariably find ways to improve the process, like using cash for more of your purchases so there will be fewer records to keep. This could lead to a bonus. Studies have shown that psychologically it is significantly harder to spend cash than it is to use plastic. At the beginning of each day try budgeting your cash needs for that day. Then try to live on that amount of money. Say, $8.50 for lunch at the cafeteria, $4.00 for coffee and doughnuts, $5.50 for cigarettes, and $7.00 for a drink after work. You might then find yourself asking the question, “$25.00! For what?” It might give you a little more encouragement to quit smoking. Perhaps you will decide not to stop at Tony’s Bar and Grill every night after work; all because you decided to floss one tooth.

By the way, dentists tell us you only need to floss the teeth you want to keep.

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