Have you ever found money randomly on the street? It’s a pretty amazing feeling. I jokingly tried on my high school letter jacket (which happened to have smelled of Drakkar Noir) a few years ago, reached in the pocket, and pulled out a $20 bill. Finding money that you don’t expect to find is just awesome. Plain and simple. In fact, there is an entire website dedicated to this (in Indiana). It’s called IndianaUnclaimed.gov. It’s basically money you forgot about, just like the $20 in my Drakkar drenched letter jacket. But sometimes people “find” money that isn’t lost. The only thing these peeps have lost, is their minds.
It is NOT uncommon for working professionals to pay for business expenses, and then submit reimbursement requests to their employers. It is also NOT uncommon for these same employees to go all “Publisher’s Clearinghouse” with their reimbursement checks. Let me say this loud and clear: BUSINESS EXPENSE REIMBURSEMENTS ARE REPLACING MONEY THAT YOU ALREADY SPENT. Do not cash reimbursement checks. Do not use these checks as shopping money. Replace the money that you spend. End of story.
I’ve seen people blow through $1,200-$1,800 per month like it was nothing because the money came to them in the form of reimbursement checks. Meanwhile, they are racking up serious credit card debt that they are (in)conveniently ignoring. Whether you are misappropriating $30 or $3,000 in reimbursement checks, you need to screw your head on straight.
Another factor in all of this, as previously alluded to, is the personal credit card debt incurred due to misuse of the reimbursement system. Using your Disney card to earn points to go see the giant mouse? Well, I don’t exactly like it, but at least pay off your damn bill with the reimbursement checks. You can’t have the best of both worlds. I have a more comprehensive post coming down the pike that discusses credit card rewards. Stay tuned for that.
But I digress.
If you get reimbursement checks, then you need to view them for what they are. They are a form of debt instrument. You let your company borrow YOUR money to pay for their crap (client gifts, dinners, Sybaris visits, whatever). When they pay you back, then you need to get YOUR financial house back in order. Don’t let the nominal size of the check detract you from doing the right thing. If you withdrew $30,000 from your kids’ college fund to pay for last week’s (hypothetical) business expenses, wouldn’t you put the money back in when you were reimbursed? You better say yes. This is exactly how you need to view all business expense reimbursements.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.