Today''s featured article comes from wisebread.com and offers us some healthy advice on how to ''Go on a Financial Detox.'' Most people think a detox is just for the health conscious. Well, today we unearth the power of detoxing our finances... from locating toxins in your spending to identifying hidden fees in your utility bills. What are some unknown toxins that often go unto iced? We would love to hear from you! Tweet @pawng. Read the article below:
You''ve probably heard the term "cleanse" or "detox" in reference to physical health. "Detoxification" originally referred to the process that drug addicts go through when experiencing withdrawals associated with severe addiction. The concept of "detoxing" has taken on less severe connotations in recent years, but still involves the same basic principle — removing toxins from the body so as to attain a healthier state. The most basic “detoxes” or “cleanses” are pretty simple. Some people stop eating processed foods. Some people might go as far as fasting for a couple of days (or longer), others take expensive fiber capsules to “flush” out their system, and the most fanatical might combine all of these with a trip to the sweat lodge and a good high colonic. The principle is obvious — add clean fluids to the system so as to push toxin-laden systems out.
I’m not dissing detox — I think that a well-controlled body cleanse can be good, if managed carefully. But there are plenty of websites to guide you through an intestinal cleansing — what if your biggest problem is not your clogged colon, but your hemorrhaging bank account? Then you’ve got a different kind of toxin — toxic spending. (See also: 37 Savings Changes You Can Make Today)
Toxic spending is spending that you can’t control (and as a rule, spending that you can’t afford).
Roughly 90% of detoxing involves preventing new toxins from entering your system. Whether your detoxing from heroin, nicotine, or caffeine, the first step is to stop the toxins from re-entering your body. Flushing toxins from your body is an important step in detoxing, but it’s pointless if you don’t plan on preventing toxins from re-appearing.
The same can be said of a spending detox — the majority of the cleansing process is learning to stop stupid spending behavior from reoccurring. Toxic spending must be reduced, or even stopped altogether.
A spending detox is all about prevention, planning, and learning to let some things slide.
Locating Unidentified Toxins
When you embark on a bodily detox, you probably already familiar with the majority of the toxins that are making you feel sluggish — because you probably put them in your system knowingly. You know you aren’t supposed to smoke, and you’re aware that five cups of coffee per day might be a bit much. You know that you will feel better if you take it a little easier on the martinis.
But there are also toxins in your system that you can’t identify — and you may never know that they are there. Free radicals, pollutants from the environment, beauty products, and chemicals coating our foods; we may feel the effects of these toxins, but we’re not necessarily aware of their specific presence.
The same goes for toxic spending — there’s the spending you know, and the spending you don’t even realize is taking place. If you frequently find yourself staring at a negative checking balance and can’t figure out how you got there, then you’re probably facing an unknown toxic purchase or two.
How do you find the hidden toxins in your spending? Simple — you examine your bills and bank accounts in great detail. If you receive paper bills, go over them with a highlighter and a fine-toothed comb… OK, just a highlighter. Mark any purchase or charge that you see that you don’t recognize and investigate. There should be a phone number associated with purchases made online — call and find out what the heck it is that you bought.
On utility bills, look for hidden fees or charges that you don’t recognize. Cell phone companies are always trying to add new services to your account without your permission, and we all know how major banks are trying to figure out ways to charge you for things that used to be free — you know, like checking accounts themselves.
If you use online banking, export the last three months of your checking account ledger into a spreadsheet. Sort by transaction name/type, and then delete extraneous information. I do this on a semi-regular basis because I have never seen a bank that is willing to present most of my purchases in an easily examined format online. My bank, for instance, only displays the last 30 purchases made — since I make almost all of my purchases with a debit card, this means that I only see about five days at a time and have to keep clicking NEXT to see purchases made before that. A spreadsheet allows me to sort and track ALL monthly expenditures, which is how I find out when a software vendor charged me a monthly maintenance fee for a product I don’t use or my bank tacks new fees onto my account without notifying me.
Once you’ve found unknown expenses and dealt with them, you will still need to monitor your accounts to ensure that they don’t reappear.