Once upon a time, a woman started a business. She got her business license in the mail and went down to the local credit union to open a business account. Business was slow. So slow, in fact, that she didn’t feel the need to use a check register to track the income and expenses. (I didn’t say she was business-savvy.) Transactions happened only once every few weeks. One day, an order arrived through the mail which a customer had overpaid shipping by $1.25. The business owner sent a refund check for $1.25 along with the customer’s order. Well, time passed, and the woman was purchasing supplies for the business. She knew exactly how much was in the bank, had just checked before going shopping. She purchased so much, there was only 86¢ remaining in the bank account when she was done. Whew! That was a close one! The very next day, a $29 overdraft fee appeared on the bank account. What was this? Could it be? Did the person to whom she had written a $1.25 check to weeks before (and completely forgotten about) have finally deposited his check? Yes. Yes he did. An expensive but important lesson about the value of keeping track. (The irony is that the business in this “hypothetical” story was making and selling check registers.)
The moral of the story? Be smart, track your expenses, or you may end up paying what Dave Ramsey refers to as “stupid tax,” like me. Or, rather, like the “hypothetical” business owner in the story.