We hear about smaller plates causing you to eat less, but did you realize that smaller wallets are good for your personal finances? Wallets are getting fatter and fatter these days, what with the numerous loyalty programs around and large numbers of credit and debit cards that consumers hold. SmartMoney says:
Hauling around all that junk not only encourages consumers to spend more (and more thoughtlessly); it also makes it harder to keep track of that spending. "The more cards you have, the more likely it is that you'll forget to pay one of them," says Peter J. D'Arruda, founder of Capital Financial Advisory Group, in Cary, N.C., who teaches clients to streamline their finances. Another concern: the possibility of ID theft. It's a point reinforced by a recent study of claims data by Travelers, the big insurer, which found that 76 percent of all cases of identity fraud reported in 2009 resulted from the theft of something physical — say, a wallet or credit card. By contrast, just nine percent were due to an "online or data breach."
Here are a couple of tips for slimming down your wallet.
- Make a list of what's necessary. Make sure you stuff your wallet with the essentials, such as driver's license, credit or debit card, and a small amount of cash. SmartMoney also recommends carrying a bail-bond card (for which there is no "convenient substitute"), which can cover the bail and set you free in case you are ever apprehended for a traffic violation. Also, an experiment in Scotland once showed that wallets with baby photos have the highest return rates — 88 percent — so you might want to think about inserting a cute picture of an infant in your wallet, says the personal finance website.
- Set aside some time to sort through your wallet. Take an hour or two to go through your wallet and take out items that you don't need to carry around. Remove old receipts to trash or store elsewhere.
- Use a smaller wallet. I used to carry a big, bulky wallet and crammed way too many things in there. After I started using a smaller wallet, it just did not have enough space for unnecessary items. Further, there has never been a time when I needed something that was not in the wallet.
What do you keep in your wallet? What are the essential and nonessential items in your money pouch?