How to Document Your Purchases and Why It’s Important

For his birthday last year, we bought our son a really nice mouse for his laptop, the exact one he wanted. It was a mouse designed for the types of games he enjoys playing on his laptop, with a bunch of extra programmable buttons and small weights so he could adjust the weight of his mouse just like he wanted.

Flash forward to a week ago. His mouse suddenly stopped working, and the manufacturer told us to return it to the store where it was purchased. The problem was, without a receipt, we weren’t sure if they would accept the return.

Fortunately, I had a record of it. With about two seconds of searching on my phone, I had an image of the receipt, which made the return incredibly easy. There was no looking through boxes or envelopes. There was no shrugging our shoulders and chalking it up as a loss. It took a few seconds, and we had everything we needed for a new mouse.

The part of this picture that made everything so easy was having all of those purchases stored in one place, a place that was accessible on my phone and easily searchable. Setting that up took me a few minutes to start and perhaps 30 seconds every time we make a notable purchase, but it has saved us time and time again.

That searchable purchase database has helped me find manuals, which have helped me maintain and repair lots of things. For example, I might be trying to do something like perform maintenance on our lawnmower. I’m out in the garage with tools all over the place and I don’t want to have to go around the house digging through cabinets to find the manual. With this setup, I can just search the database I have and either find the manual immediately or find a way to get it very quickly.

That searchable purchase database has helped me figure out which replacement part I needed, making sure that I find the right brand and type. For example, I was at the store several months ago and my wife texted me to get some light bulbs for our bathroom. The light fixture in our bathroom has several sockets and I knew they weren’t all burnt out, so I wanted to get bulbs identical to what we were using. A quick search showed me the exact type of bulb to get.

That searchable purchase database has helped us with a lot of returns. There’s no searching for paper receipts or checking online sources when you have this kind of database. You can just find it on your phone quickly.

That searchable purchase database is incredibly useful during tax season. I can easily look through the purchases of the last year and see if any of them are tax-deductible.

[Read: How to Get Help With Your Taxes While Social Distancing]

That searchable purchase database comes in handy again and again. It’s not something that comes in handy every day, but when it does come in handy, it really comes in handy, making the consistent but trivial work needed to set it up and maintain it well worth it.

Let’s dig in.

How to pick the right software

For this to work, you need to have the right kind of software behind it. You need a software package that can do several things at once.

1. It needs to be able to store images and text together. For example, if I buy some fresh LED light bulbs for the main room in the basement, I want to be able to type in what I bought (“light bulbs for basement”), the exact brand name and type of bulb (in this case, “GE Reveal LED 65 W equivalent canister lights”), and an image of the receipt of my last purchase. That way, if I know I need to buy some new bulbs for the basement, there are a lot of things I can search for to find the right information.

2. It needs to be easily searchable. I have to be able to type in a few key terms, like “light bulb basement,” and quickly get a very small number of results, one of which is what I’m looking for.

3. The data needs to be available on lots of devices. I need to be able to search this database on my phone, my tablet, and my work computer, and my wife should have access to it on her devices as well. Thus, I need to be able to share this data with her.

4. It needs to be really easy to add new information. If I buy something new, I need to be able to add it to this database with ease. It should be as easy as taking a picture with my phone and dropping it straight into the software and typing in some text right next to the image.

5. Ideally, it’s able to translate the text found in images and make that searchable with a high success rate. The software should be able to examine an image, pull out any text it finds in the image, and make that text searchable, so that if I type in something like “GE LED,” it finds the right notes even if I didn’t actually type in that information.

6. It needs to do all of those things as inexpensively as possible. Ideally, the software is free, at least for enough usage that you can really figure out whether it’s useful. I don’t mind freemium software where you can use it at an introductory level to figure out if it’s right for you and then sign up for some kind of pro version or a plan if it’s really useful and you use it constantly. I like freemium software because I actually want to pay for software that’s really useful to me so the company that makes it can continue to exist and keep updating it. I don’t want software that requires a big up front cost.

Here’s why I ended up using Evernote.

I chose Evernote for this database because it almost perfectly matches every need that I listed above.

Evernote lets you store text and images together in a single note. I give that note a name — usually something like “Light bulbs for basement – GE Reveal LED 65 W equivalent canister lights – last bought Aug. 31, 2018 at Menards.” Within the note, I’ll find a picture of the box of the last time I purchased the bulb, along with a picture of the receipt from the hardware store from that purchase. Every notable purchase has a note like this. (I’ll get back to my workflow for doing this in a bit.)

Notes stored in Evernote are easily searchable. I just fire up Evernote on my phone or desktop and type in what I’m looking for and the right result just pops up within a second at most.

Evernote available on lots of devices and shares data seamlessly between those devices. I have Evernote on my phone, my tablet and my work computer, and I can share the data with my wife so she can have it everywhere, too.

It’s pretty easy to add new information to Evernote. I just create a new note, give it an appropriate name, and take any necessary pictures with my phone’s camera, which sticks the image right into the note. It will even trim off the excess stuff in the picture, leaving just the receipt or, sometimes, the item package.

Evernote is pretty good at extracting text from images and making it searchable. This happens with a pretty high success rate, though it’s not perfect. This is done automatically when I add images to a note – I don’t have to do anything.

Evernote uses the freemium model. This means that it’s available in a free version to try out and see if it’s worthwhile for you, but if you become a heavy user with lots of notes, you’ll want the additional features of the “pro” version.

However, Evernote is not the only option here. There are a number of other options that can do most of the things listed above quite well. Google Keep can do most of these things and is completely free. Apple Notes is a good choice if you use mostly Apple products. Microsoft OneNote is another really good choice, too, and it’s completely free — in fact, the only reason I didn’t choose that one is I didn’t particularly love the phone interface when I started doing this, but it’s much improved since then. I’d strongly recommend looking at those options if you’re thinking about this — the reasoning here is just why I ended up choosing Evernote, not a statement that there aren’t other options that can handle all of this.

Here’s my workflow for using this purchase database.

This is my workflow for setting up my purchase database, adding new entries, and then using it on the fly. I’m describing things in terms of Evernote, but most note software packages will have very similar analogies.

1. To set things up initially, I created a notebook called “Purchases” within Evernote. This notebook contains a giant pile of notes, and each note describes a specific purchase. Whenever I create a new note describing a purchase, it goes into this notebook.

2. Whenever I purchase almost anything, I create a new note for that purchase. I don’t really filter what should and shouldn’t go into the purchase database. If it’s a receipt with a bunch of items on it, like a grocery receipt, I’ll usually just create one note for it that includes an image (or a few images) of the receipt. If there’s anything individual on that receipt that I may want to return someday, I’ll make a separate note for just that individual item.

When I buy just a few items, I make a note for each item that I purchased. This usually includes the same receipt image in each note. I do this for online purchases, too. I’ll take a screenshot of the online receipt and start a new note for that purchase, including that screenshot in the note.

3. I’m pretty careful about including several pieces of info in the name of the note, for quick reference. I usually include a one- to four-word description of what the purchase is for — “light bulbs for basement” or “lawnmower”, followed by the manufacturer and model, followed by the date I bought it and the store I bought it at. So, for example, a note might be entitled “Light bulbs for basement – GE Reveal LED 65 W equivalent canister lights – bought Aug. 31, 2018 at Menards” or “Lawnmower – Honda 21″ NeXite – bought May 21, 2019 at Lowe’s” or “Groceries – May 22, 2020 at Hy-Vee.”

Using a good note name like that lets me very easily figure out which note I’m looking for when I do a search later on.

4. Within the note, I include a picture of the receipt at the very least, and often more information such as a copy of the manual. If it’s an appliance or a piece of equipment that comes with a manual, I usually look for the manual online and add the full document directly to the note. If I know it will need batteries or other things in the future, I add that info. For example, on our note about our printer, I have the types of ink cartridges it needs along with pictures of the ink cartridge boxes even though the ink cartridges usually have their own separate notes.

I’ll often add links to the product page on the manufacturer’s website as well.

5. I often add a few tags to the note, though I rarely use them. Tags help me find notes of a similar type. I don’t use them too often, but they do help sometimes. For me, the biggest helpful tag is “taxes”. Notes with that tag on them are ones related to items that I think might be tax-deductible, so I’ll pull up that tag whenever I’m doing taxes and go through all of the ones with that tag. Once I’ve decided if the item is tax-deductible or not, I either add it to my taxes or just forget about it, and, in either case, I remove the tag.

I also like to have a tag for the room in the house where the item is usually found and a few others related to specific hobbies so I can review specific hobby purchases, but I don’t do that particularly often.

6. This notebook of purchases is easily shared with others. Sarah has the capability of accessing it on her phone if she chooses, and I can easily share it with others, too. This is done with just a few clicks and a few keystrokes, provided I have the email address assigned to their Evernote account.

7. When I want to find information about a past purchase, I just do a text search for the terms that immediately come to mind regarding that purchase. The vast majority of the time, the first result is the exact note I’m looking for. On occasion, it’s one of a few matches. Rarely, I have to broaden my search a little to find what I’m looking for, but I usually still find it within seconds.

In general, if I can’t find it within a few seconds of searching, that means I forgot to make a note for that purchase. That’s on me, not the software.

[Read: Traditional Financial Advice Is No Longer Relevant]

A few questions immediately come to mind.

I’ve explained this system to a few people and I’ve heard the same few questions almost every time, so let’s address them now.

Doesn’t this take a long time? Not really. Once you have things initially set up, with your software installed on all of your devices and a notebook ready to store the notes, it’s pretty quick. It takes me maybe 30 seconds to create a new note each time I buy anything. The longest it takes is perhaps a few minutes if I bought several things at once that I want to put on individual notes.

How do you decide what should be an individual note? At this point, it’s more instinct. I don’t really think about it, I just kind of know. However, the factors that make up that determination are pretty clear to me. Is this something I’m ever going to need to return? Is this something that I will want to exactly replace or repeat-buy in the future? Is this something that I might deduct on my taxes? Is this something that I might want the manual for in the future?

Using those rules, it’s pretty easy to see that most food items and household supplies (like trash bags and toilet paper) don’t really need their own note, but a lot of other things do. I usually just know.

What about purchases made before you implemented this? I really don’t worry about them. I have added notes for a few really big things here and there, mostly just so I have the manuals, but I don’t really stress out about it. I basically do it on an ad hoc basis, whenever I think of it or notice that it might be useful. I tend to add things where I think

Do you use a premium (non-free) version of Evernote? Yes, but I use Evernote for lots of things beyond this. I think that if this were your only purpose for Evernote, you probably wouldn’t need the premium version of the software. If you start finding lots of uses, though, you’ll probably start to exceed the limits of the “free” version, but I don’t think it’s a bad thing to pay for software that you get a ton of value from.

Let’s wrap this up.

I get a ton of value out of having this purchase database. That value doesn’t show up every day or even every week, but there are moments when a quick search through this database really saves the day. It comes in handy during tax time and every single year seems to result in a lower tax bill. It comes in handy when I’m at the store (particularly the hardware store, for some reason), keeping me from wasting money on the wrong purchase or having to head home to figure out what I actually need. It comes in handy when I need a manual really quick so that I don’t do the wrong maintenance or repair. It comes up again and again for lots of lesser things, too.

The real trick here is making adding purchases to your purchase database completely routine. You have to consciously remind yourself to do it all the time. However, the more you do it, the more valuable your purchase database becomes. You find yourself relying on it more and more, and finding that it saves you a ton of money and time and effort.

The only real cost for trying this out is a bit of your time, as there isn’t any cost for most software packages that can handle this. If you find it’s useful, keep it up and it will become more and more valuable to you.

Good luck!

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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