So many people carry their financial life in their purse. Mellody gives you tips on how to straighten it all out, and protect yourself.

Mellody, my wife insists on carrying everything in her purse, including cash, receipts and credit cards. I think this is bad management, and it could be a safety issue. How much cash should my wife carry, and what about all the other things in her purse? – Derrick, Houston, TX  
Let’s start with the cash issue. There is no magic formula for how much cash you should carry, however, the key is to only carry as much as you can afford to lose. It is, however, important that you carry some cash. Studies show that when people use plastic versus cash they spend 12-18% more. Also, you don’t want to use your credit card or debit card to make small purchases for things like chewing gum. If you are just paying the minimum balance, you could pay interest charges on your small purchases.

I know some people that keep all of their receipts in their wallet, and I mean all of them. Do you have any advice for people who do this?
Receipts not only clutter your wallet, but they could contain information about you (like your name), that identity thieves could use. The best possible thing to do is to take out receipts from your wallet every night and either compare them at the end of the week online against your bank account or credit card website, or save them until the end of the month and reconcile them against your monthly statements. Once you have reconciled them, make sure you shred them or at least destroy them so no one can read them. Also, never leave receipts lying around in your house or office; someone could walk off with them and it will be harder for you to track expenses. I would suggest keeping them in an envelope in your desk until you are ready to reconcile them.

What about the multiple credit cards? You have been pretty clear in the past this is a definite no-no, correct? 
You only need to have one credit card. The average person now has about two credit cards, which is down from three cards just a year ago. This is really good news. The more cards you have, the more likely you are to overspend. Second, with two cards you have to keep track of two different statements and two different sets of receipts, which makes it more difficult. Also, remember that how much credit you have available does affect your credit rating, even if you do not regularly use the card.

What should you absolutely not have in your wallet? 
Unfortunately, many people carry things in their wallets which could lead to identity theft. Thankfully, identity theft cases declined last year, but 8.1 million people were still victimized, which resulted in losses of $36 billion. The number one thing you want to protect is your social security card, which can be used for everything from buying a car to opening a credit card in your name. Under no circumstances should you carry your social security card with you. Can you remember the last time someone actually asked you for your social security card, so why would you carry it?

The same goes for things like your utility bills. These things have personal information on them that people can use to harm you. Also, don’t carry important passwords, and if you are traveling, leave your passport in your hotel. You should only carry around a photocopy of the picture page.

Is there anything else people should not carry in their wallets? 
Do not keep anything in your wallet that has expired. This includes things like old credit cards or membership cards. Just because they have expired does not mean that thieves will not try to use them. Also, remember most of them have at least your name on it, and probably your address and other personal information. The more information you keep out of the hands of others, the better.

One last thing that people don’t think about removing from their wallets are old hotel key cards. Although almost no U.S. hotels put personally identifiable information on their key cards, you want to still take precautions, especially if those cards can be used to make purchases at the spa or gift shop. If you leave your card in your wallet or hotel room, you are leaving it up to the hotel to quickly erase the card before someone makes a purchase. My best advice is to destroy them after you have checked out. You don’t need to return them to the hotel.

> Click here to return to the main Tom Joyner Show page