Tax Time Is “What the Heck Was I Thinking? Audit” Time

You always know when it’s tax season at the House of Yeager, because I set up the card table in the middle of living room and pile it high with boxes of receipts, copies of our previous tax returns going back to the Carter Administration, and every unopened envelope we’ve received during the past year marked  “Important Tax Information Enclosed!  Open Immediately!”

Since you need to pull together your financial records at tax time, it’s a great chance to take an hour or so to also do a simple exercise I call a “What the Heck Was I Thinking? Audit.”  I know from personal experience it can save you hundreds – or even thousands – of dollars a year by helping you avoid spending money that you’ll regret later.

It’s simple:  Just quickly review your credit card statements, canceled checks, receipts, etc. for the larger purchases you’ve made in the past year, particularly the discretionary, “nonessential” things you’ve spent money on.  Then ask yourself one question:  “If I had it to do over again, would I have bought that?” Make a note of those things that you spent money that you now regret, and then take a few minutes to really study that list once it’s complete.

The idea is to learn from your spending mistakes so that you won’t keep repeating them.  What trends and bad spending habits emerge from your list?  Maybe – like a lot of people – you rush out and buy the latest tech gadget the day it’s released, only to regret it later, since prices on consumer electronics often drop and the quality increases if you wait a few months.  Or maybe you’ll notice that you’re prone to impulse shopping at a certain store or time of year (e.g. times when you’re stressed out at work), or that now you regret those sushi dinners you treat yourself to every month when you realize you’ll still be paying for them on your charge card this same time next year.

It’s also helpful to carry your “What the Heck Was I Thinking?” list with you in your wallet or purse, and glance at whenever you’re headed out on a shopping spree.  Remember, “Spending Procrastination” – putting off until tomorrow what you desperately want to buy today – is a virtue, not a vice, when it comes to saving money.

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Photo by Kristin Hoppe