Keeping Track of Costs - Big Book of Receipts. (Insert dramatic piano chords)

I know of at least 2 other couples who built cordwood homes, as we are building.  They both have blogs and talk about the Big Book of Receipts and the Massive Spreadsheet where they can account for every penny spent.  While I do have a spreadsheet I use to calculate costs and another where I list items like tools that I have purchased or plan to purchase, I do not have a Big Book of Receipts, nor a Massive Spreadsheet.  I keep receipts for power tools while under warranty, but I don't have every receipt for concrete mix, rebar, wood for forms.  I average 60 hour weeks at work, and typically work 11 days, then get 3 days off.  Unfortunately during some weeks, I might work 12 hours 4-5 days a week.  Between work, family obligations, marginally keeping up the house we are renting, vehicle maintenance, and working on our property, it just doesn't seem like there is time for the drudgery of a detailed accounting.

Mostly I use my spreadsheet to establish a bill of materials for the build, then populate it with the best material prices I find.  Since we are self financing and building, it is important to know what each step is gong to cost so I can make sure we have money available for it.  At the end of it, I'll be able to give a rough cost of what we have in the place.  I guess I'm more interested in getting a good home built than being able to detail how much we spent, or how much we saved.  I have been chided more than once by the previously mentioned couples because they think I should do like they are doing with the Big Book of Receipts and the Massive Spreadsheet.  Shrug.  I've always been more interested in doing what I think is right for me than trying to appease another person's obsession.

I do not think trying to please others is a good plan, but I think by not saving receipts and keeping better track of your money, you are hurting yourself without really knowing it.

That is because receipts represent a real world value, and by not keeping them, you might be tossing money away. Here is an example of that. Just last week I rummaged through my receipts and found where I had purchased shocks for my car in 2014, and did a brakes job in 2015. Because part-makers put lifetime warrantees on their parts, using the warrantee as a means to sell more parts, and banking on the fact that most people do not keep their cars long-term anymore, or keep their receipts, most car owners will not cash in on the forever warrantee. But because I do, do those things, I saved myself over $1000. In other words, those two receipts represented real $100 bills.

Let me ask you this, if I handed you two envelopes with (5) 100 dollar bills in each one, wouldn't you save them until you needed to spend the money? If so, then why not save receipts that represent money as well?

I keep track of my receits and use a spreadsheet unlike 90% of Americans. But that is okay, something like 85% of American's do not have amy money in savings, and live paycheck to paycheck too, so if 85% of American's are broke, I have NO PROBLEM with doing something they are not doing. No problem at all doing that. But then again in terms of finances, I have done some amazing things that most American's can only dream of: being debt-free, retiring at age 42, turning a hobby farm into a full-time farming venture.

Every succesful business carefully tracks their money, and personal finance is no different then running a business. By making budgets and adhereing to them, I control my money, instead of it controling me. It is actually very liberating because I can determine where my money is spent instead of later wondering where it went.

At first, I tried to just track farm money, but found that there was too much interaction between farm and personal money, so now I just track everything. I really am so much better for it, the key is to make a spreadsheet system that is quick and easy to do so that you only spend 15 minutes per week jotting down your income and expenses. And receipts are just a matter of making sure you always get one at purchase, inputting the data, and then putting it in a box for safe keeping.

Bob, another reason you may want to track expenses and keep receipts, at least on the house build, is that in the event you sell it, you will need to calculate your cost basis and thus your capital gain. Although the exemption for capital gain on sale of a primary residence is fairly generous now, who knows what time, inflation and politics will do to that exemption in the future.

To be clear, I do keep receipts and track expenditures, otherwise it would be too easy to overspend and end up with a half finished home.  We keep receipts for any big ticket and warrantied items.  It is also important to keep receipts and invoices from any contractor work you have done.  It takes nothing for a contractor to slap a lien on your place due to an unpaid bill.  I've known a person who didn't know there was a lien placed against his property until he tried converting his construction loan to a mortgage.  Even though he had the receipt and cancelled check showing that he had paid the bill, he sill had to go through a lawyer to get it removed.  And the bank put him through the wringer about a mortgage because there had been a lien on the property.  The fact that he had documentation that the lien was invalid in the first place didn't matter.  So yeah, keeping receipts is a big deal.

We also budget and keep a calendar showing when things are to be paid and when money will be deposited.  Every 3 months we sit down and do a budget review to see how we are doing and discuss any changes we need to make.  My wife hates spending money and loves finding sensible ways to cut expenses and save more.  I think budgeting and using financial resources wisely is a part of the permaculture ethic of responsible stewardship.

I'm referring specifically to keeping receipts and making spreadsheet entries when buying a $5 box of screws.  However, I do think that it is important to keep receipts for items that can prove you did the build to code.  I'll keep every receipt related to supplies I purchase for electrical, plumbing, septic, windows, insulation and the like.  What gauge wired did you use for outlets?  Here's the receipt that shows what gauge wire I purchased.  Did you use the right size PEX and the correct crimp on fittings?  Here's the receipt for what I purchased.

We are building a home with an oak timber frame with cordwood infill.  The fact that it is non-traditional construction will automatically limit the buyer pool if we (or our heirs) ever have to sell the place.  We aren't building with resale value in mind.  I'm not building to or better than code for resale value, I'm doing that because it is safer and more reliable.  I don't want plumbing issues, and I don't want the place to burn down due to electrical issues.  We are building the house that we want to call home until time to pass from this earth.

So if you are keeping track of stuff anyway, why not track every penny spent?

If you are not tracking the expenses of a box of screws...the little stuff...you are leaving money on the table. It only seems little when you are not tracking it, because it only takes (15) $20 items you do not track, to equate to a "big ticket item", depending of course, on what you define a big ticket item as. And you buy a whole lot more of those items, then big ticket items.

It comes down to this, "watch your pennies, and the dollars take care of themselves."

That is another way of saying, the little stuff adds up. Kind of like how all those short, local trips put a lot more mileage upon your car then a single cross counry trip.

But you are leaving money on the table too, because ALL of it is tax deductable for inome tax purposes. You seem to be saving receits based upon fear, with a likelyhood that 99-1/2 percent of them, they will never ask for, yet leaving a lot of tax deductions behind.

Travis Johnson wrote:So if you are keeping track of stuff anyway, why not track every penny spent?

If you are not tracking the expenses of a box of screws...the little stuff...you are leaving money on the table. It only seems little when you are not tracking it, because it only takes (15) $20 items you do not track, to equate to a "big ticket item", depending of course, on what you define a big ticket item as. And you buy a whole lot more of those items, then big ticket items.

It comes down to this, "watch your pennies, and the dollars take care of themselves."

You and Artie make some good points.  I think I'll adjust my philosophy a little.  Being too hardheaded to make changes is a bad thing, and a day when you can learn something is a good day.  Thanks for your replies.

I second what Travis and Artie have said, and add that making a habit is at the root of it.

Take an empty envelope, write the month or week on it, and just put all your receipts in it, that's all. Don't worry about recording everything daily after you are tired and can't think straight. Just know that you will be able to find the receipt later if you need it (chances are you can remember what month you bought a thing, or did a task) and come tax time, you can do the sorting and data entry when it counts.

If you make a file folder for equipment with manuals, warranty info, etc., you could put that receipt in there to keep it together...(maybe even have it rung up separately so other things aren't on that receipt?) (I usually get separate receipts for personal tools, versus materials for work, to keep the accounting simple for being reimbursed)

The little stuff really does add up! Those $5 screws, $2.50 of wire nuts, 3 sacks of concrete... and it's fine if you are using it all.

I'm often in a position of needing to get something done within a short time window, without time for a trip for more supplies.
I find myself justifying larger purchases (let's just say it's multiple sizes...different length bolts) to be sure I can complete the job on time, in one trip. I figure if I have to stop and go out to the store for different bolts, then I can just make that second trip to the store later to return the wrong size bolts instead...makes perfect sense, two trips either way, until the receipt is missing making the return more difficult, or worse, now I own the extra "wrong size" bolts...(because there isn't time, or the store is closed on the way home...) This can also happen with buying 20 of something, because you know it was 12, or was it 16? oh well, you might drop one down a hole, or cross-thread it... 20 is safe, right?

After reading and pondering on posts from Travis and others, I went back through and dug up as many receipts as I could find.  In order to anticipate costs so I can make sure to have money available, I have a spreadsheet where I have priced out the materials and some tools I will need for each step in the process.  I created another page in the workbook where I can track material, tool, and services costs for each step in the process.  When my wife began to fret last weekend, it was nice to be able to say that to this point we have spent X.  For the next step we need X, for the next step we need X, etc.  Then to be able to say "and we have Y available for that.  Concern dissipated.  I know there will be surprises along the way, but when you keep track of costs and expenditures you have fewer shocks.  Surprises we can handle, shocks we don't need!

In another thread concerning USDA grants, Travis talked about keeping track of expenses and income even before you need the information.  Very good advice.

Thanks Bob for your kind words. And while this is not really the topic to be discussing this fully, one aspect of what you said in your opening statement should have been addressed by me a long time ago, and that I am very impressed you have chosen to build a Cordwood Home. I personally love the concept, and think it is great you are building one. They do not get a lot of discussion on here, but I think they are a great way to build a cheap, efficient home.

I am not just saying this because you said some kind words about me, but really because I think cordwood homes would work well for others, yet few consider them.

Get a shoe box and drop them in there and sort things out when you can. Later, sort by month and make 12 piles, then enter one month at a time into your sheet when you have time.