One of the first major challenges I had to overcome during my financial turnaround was right there in my own back pocket. It was an overstuffed monstrosity, holding several credit cards, a gigantic pile of receipts, and a plethora of other nonsense. When I actually needed something out of it, it was a challenge to find it amidst the chaos – but somehow it was easy to find a credit card in amongst the junk.
What I eventually found is that an optimized wallet helps with personal finance recovery and with remembering seldom-used but key pieces of information. When I moved from using the wallet as a catch-all to using it as a tool, I began to realize that it could save me a lot of time and money compared to the way I used to do things. Here are six of the tactics I used.
Junk all but at most two of your credit cards.
This is the most important thing you can do, especially if you have a constant temptation to bust out the plastic more often than you should. First thing first: find a good general use credit card. Just one, and I can guarantee you it’s not the credit card you got at the checkout counter during your last giant shopping binge. Once you’ve identified that “best card,” take every other credit card in your wallet and chuck ‘em. Put them in a safe place that’s not in your wallet. Eliminate the balances on all of those extra cards, then eventually cancel them.
This tactic works well because you don’t have a lot of choices. You can’t look at eight cards in your wallet, think “This one doesn’t have a balance on it… I’ll use it!” and spend away – you have to face that one card and know that you’re putting a larger balance on it. Plus, if you’ve chosen the card well, you’ll be racking up some decent rewards with it.
Wrap a picture of your goal or inspiration around your credit card.
Still not convinced of your own willpower? Take that one credit card and wrap a picture of your personal finance goal or your inspiration around it. Wrap that picture around your card and tape one edge of that picture to the other picture, creating a pocket or a sleeve for the card to live in. Then, when you feel the urge to pull out that card, you’ll pull out that picture, too, and it will serve as an immediate reminder of the big dreams you’re postponing to make this little trivial purchase.
I personally used a picture of my son in this way for most of a year until I broke my bad credit card habits, because he was the inspiration for my turnaround. Whenever I pulled out my credit card, I’d see his face, and I couldn’t help but reconsider my purchase.
Use it for password storage.
For some people, this seems crazy, but it really works. I keep a half-sheet of paper in my wallet, folded up a few times, that keeps some of my passwords on it. I don’t keep ones that I use regularly enough to remember them, just the ones that I don’t use very often. I also don’t directly indicate which site each username/password is for – just something that reminds me what they’re for – a precaution against a stolen wallet.
Edit: Some people jumped on this as being a bad idea. However, Bruce Schneier, an expert on security issues if there ever was one, agrees with this approach wholeheartedly.
Merge some of your rewards cards.
I’m a big fan of maximizing customer loyalty programs to get free stuff, but one drawback of that is that you end up accumulating a bunch of cards in your wallet. No more. You can merge several cards onto one by using JustOneClubCard.com, which allows you to create a single card with the bar codes from up to eight programs. I have one of these and it eliminates the space for seven cards in my wallet – and makes it so that I don’t have to hunt for a particular card at the checkout.
Process your wallet once a week or once a month.
I find my wallet is the place to collect receipts and other small financial detritus. While it’s efficient as a junk collector, it doesn’t take long for that wallet to get nice and fat with garbage. Thus, once a week, I process what’s in my wallet, getting rid of all of the unnecessary receipts and other little documents that I pick up. If I need to do anything with these pieces, I just take care of it right then so that I don’t have to worry about it. This keeps my wallet thin and keeps me from embarrassing myself with a monstrous wallet full of garbage.
A corollary to this: if you find yourself actually in a routine of processing your wallet, it becomes a very convenient place to put stuff that you know you’ll need to look at again soon – almost like a mini-inbox in your pocket.
The next time you buy a wallet, don’t buy a cheap one.
I have owned four wallets in my life. The last one has lasted longer than the other three combined, but it cost double the price of the others right out of the chute. What does that mean? Don’t hesitate to spend more on a quality wallet that will last for years, even if there are cheaper options available. You’ll end up paying less per year with a really good wallet than with a cheap vinyl one, thus saving yourself a bit of money and a bit of time, too.