Help me get my financial house in order

In My Humble Opinion
1

I’ve seen posts on the SDMB more than once pitying the poor benighted souls who still use check registers or Excel spreadsheets to keep track of their finances. Apparently this is only one step up from making hash marks on a rock with a burnt stick.

Well, I’m one of those benighted souls. I have good intentions with my money and keep very close track of what I’m doing, but my information is scattered, and I laboriously and tediously update everything by hand. Yet it seems to me that entering all my purchases etc. into a money management program would be just as tedious and time-consuming as using a check register, which is why I’ve never considered buying any software.

But still, under my current system, my finances are becoming unmanageable and I’m ready to find an easier way. Here’s a snapshot of what I need to keep track of:

-several joint accounts with the BF (both banks and CUs), one of which is used for several monthly autopayments
-several individual accounts between he and I in different states (banks/CUs)
-W-4 info
-1099 info
-sole proprietorship info (no payroll, just independent contractors)
-Roth IRA
-online savings account
-debt tracking, including how much we owe, when we’ll be paid off, and how much interest each loan is costing us each month (student loans for both of us, CC debt, car loan)
-pre-tax deductions like a medical flex account
-budgeting (we have one, but we can never seem to stick to it)

What would be the best way to handle all this information? And if the only real answer is software, could you give a brief explanation as to why? I have no experience with it, and the product demos online of Money and Quicken weren’t really all that helpful.

2

I’ve heard good things about Mint.com (a browser-based money management system). Note that I have no connection with the company (and actually have happily used Quicken for the past fifteen years). Take a look at the website.

3

Can’t help you with everything, but I’ve got a couple of ideas for you

#1 - I would try to consolidate your savings/checking accounts. If you have several joint accounts, several individual accounts and a savings account, I have no idea how you would keep track of them simply.

#2 - For budgeting, the easiest way I’ve found is to take any incidental expenses, day to day purchases, groceries, lunch, etc. document them and set a single weekly dollar figure for all of it. On Sunday, you go to the ATM, withdraw that weeks amount, and don’t buy anything on a credit/debit card, only spend the cash you’ve taken out. Your regular bills get dealt with as usual, big purchases you sit down and think about together in relation to your entire financial picture.

The cash method really cuts down on how many things you have to track, because you don’t have to track anything you buy with cash. As long as you don’t succumb to taking out more cash, you’ll stay on budget. All of your other spending should be restricted to a small number of bills and debt payments.

4

I’ve also used Quicken for the last 10 years or so and think it’s just the greatest thing since sliced bread. Here’s a breakdown of what I do with it:

[ul]Keep track of 2 checking and 1 savings accounts (my husband & I didn’t consolidate when we got married just to avoid having to do a lot of paperwork, but I handle all the accounting). [/ul]
[ul]Keep track of all transactions on all our credit card accounts (3 total - 2 we’re paying down, one has a zero balance that we use for emergencies).[/ul]
[ul]Keep track of 401(k) accounts.[/ul]
[ul]Keep track of auto loans.[/ul]
[ul]Keep track of HSA balances & transactions. [/ul]

The thing that makes Quicken SOO great is that all I have to do is a couple clicks to download all the transactions from each of my accounts. I don’t have to do any manual entry if I don’t want to, but I like to enter some stuff in advance, in which case when I download my transactions all I have to do is reconcile the bank’s info with my register.

It has a feature that lets you itemize your paychecks to show all withholdings, taxes, insurance, 401k, etc.

It also has a feature that lets you split individual transactions into multiple categories. So, for instance, if you wanted to take a single large Cash Withdrawal transaction and itemize it into Groceries, Dining, Midget Porn, etc. you could do that.

Quicken also has a really nice planning feature that lets you schedule regular payments way in advance (or even non-regular ones), and they will automatically enter into your register without you having to do a thing. So things like rent, car payments, utility bills, etc. can all be entered into the calendar, with the recurring dates set, and they’ll plug into the register X days in advance of the due dates.

It also lets you schedule automatic online payments that you can send with just a few clicks. Basically Quicken sends the payment instructions to your bank sometime in advance of your payment date, and the bank will either cut a check & mail it for you, or they’ll just submit the funds electronically. All you have to do is tell it when you want the payment to be made - you usually have to submit them about a week in advance to ensure they get to the payee on time, of course. (Banks usually charge a fee for this feature - they like people to use THEIR online payment features instead.)

I really can’t imagine how I’d get along without this software, and all I have are the most basic household finance issues. There might be better options out there, but I really thing Quicken ranks pretty high (I tried Money and hated it, BTW - but that was after already using Quicken for a couple years). I think there are places that offer classes on how to use it if you need more in-depth training than the basic tutorials offer. I think they might have a free trial offer so you can at least try before you buy, too.

5

I don’t have anywhere near as complicated a situation as you, but I love, love, love Quicken.

6

Doesn’t Quicken force you into an update treadmill? I’ve heard reports that they discontinue support for older file formats, both downloading from institutions and opening locally, so that you have to buy the new version. (Updating to reflect new tax and regulatory information is a different affair.)

I’ve never used it, though. I could be wrong.

Does it let you archive your data in a non-proprietary format?

7

I can’t speak to the latest versions, but they did this to me with Quicken 2002 (I think, maybe it was 2003). What was so infuriating was that they didn’t just stop supporting an old file format (which would have been fine), but they set the code up so that transaction downloading would stop working after a given date, even if your bank still offered the old format. Because of this, I don’t buy Intuit products.

After several years of using Quicken, though, I found that we really didn’t need that level of detail on where our money was going. Right now, I use a spreadsheet to track our bills, savings, and itemize our discretionary purchases every month. This last category is really the only one that matters for us, as it’s where all the variability in our finances tends to be. I keep an eye on that throughout the month, so I know when we need to tighten up for the rest of the month or whether we still have some money to spend. It helps that our bank has a good online banking system – we use our debit cards as much as possible and just track as we go.

8

Well, I don’t think the “register or Excel” method is that bad. I think the pity you may have seen would be for people who don’t even track their money that much.

The first suggestion I can think of would be a system I used back in college:

Get a folder or manilla envelope, and use it to store all your monthly statements: bank, credit cards, loan stubs, bills, pay stubs, etc. When you get a new statement or pay a bill, remove the old copy for that account from the folder and either toss it, or file in an account-specific folder. Maybe for things like paystubs, you can keep the last two (if paid bi-monthly) or four (if paid weekly), then just remove the oldest when adding a new one. This gives you a “snapshot” of where you’re at with money coming in, money stashed, and money going out. It won’t be 100% up-to-the-minute accurate (especially on things like 401k or IRA accounts where you usually get quarterly statements) but at least you have the latest copy of everything all in one place.

You might also consider consolidating your various checking / savings accounts. Maybe you’ve got a reason for the multiples you’ve got now, but I prefer to keep things simple. I’ve got one checking account (paycheck gets deposited here, I use it for my online / autopaid bills, and it’s tied to my debit card), one savings account with about one paycheck’s income (for easy transfers to checking if it was an expensive month), and one money market account as a rainy-day fund (higher interest than the other two, but more limitations on minimum balance and number of withdrawals). All three are with the same credit union, so it’s pretty easy to move money around. I’m considering replacing the money market with a high-yield online savings account, but I’ve got wedding expenses I want to deal with first.

On the software side, I’ve been using MS Money for almost ten years. I know that because I’ve been using the same copy of Money '98 since I picked it up cheap at a Computer City going-out-of-business sale my last year in college. :slight_smile:

I track my money thusly:

  1. I have an account set up in money for each of my accounts: checking, savings, money market, 401k, IRA, mortgage, and my credit cards.
  2. My paycheck is set up as an automatic deposit into checking. It’s a special transaction type that tracks all the pertinent details: gross pay, benefit credits from my employer, benefit payments (both pre-tax and post-tax), tax withholding, and transfer to the 401k account. All the math is handled by Money, and the net pay is marked as a deposit in checking. I only have to tweak this when I get a raise, or the benefit costs / credits change.
  3. I manually enter all deposits I make from other sources (generally checks as birthday gifts or repayments of money I loaned friends) as I get them. This isn’t as critical now that I’ve got online access, but I had a deposit go to someone else’s account many years back, and I didn’t catch it until I balanced my monthly statement in Money.
  4. Every month, I balance my accounts when I get my statements. I enter in all the transactions at this time from the statement. For things like my checking account and credit cards, that means that Money doesn’t always have up-to-date information on what the balance is. And I’m OK with that, at worst Money only a month out of date. If I need up-to-the-minute status, I use my banks’ online account access pages to check.

The benefits I get from the software are:

  1. Category tracking of my spending. I do most shopping now with my debit card (other than small cash transactions), and Money remembers the category associated with a given payee (as long as you’ve entered it before). So when I enter in a $150 payment to Safeway, I don’t have to keep entering “Food -> Groceries” for the category. I’d assume this is probably standard in any financial software.
  2. With the above, Money has an auto-budget tool that will build a budget based on what you’ve been doing in the past (the period examined is customizable). You can tweak the budget and save it, then later compare that with your actual spending habits in the later months.
  3. As part of the monthly update of my 401k / IRA funds, Money tracks the fund prices, and I can compare historical performances to see if I might be better of shifting money from one to the other.

The only drawbacks with the software are mostly due to its age. Its online functionality points to long-dead links, and transactions downloaded from my bank are only available for newer versions of Money. But I’m ok with that, since I think I get a better feel for where my money is flowing by doing the manual data entry. And it’s not that arduous of a task anyway.

9

I use excel. I’ve tried some of the commercial programs but have found them overly complicated and difficult to customize. Excel is transparent (I can see what it’s doing) and easy to adapt to any changes. I set up a sheet for each month with categories, a budget for each category, and daily entries. Everyday I enter my expenses from the day before and reconcile. Sounds tedious but it takes me five minutes; I just use my receipts from the previous day and since I do it everyday, I’m never off. Plus, I’ve caught fraudulent charges right away. For things like 401ks, savings, etc., I keep a running total on the bottom of the monthly sheet and update them when I get a statement.

10

One of the best things I did for my financial understanding was to enroll in a continuing education course at the local community college. I took a course in small business bookkeeping. Setting up a ledger and journal really helps a lot of exactly the types of issues you seem to be having gel. There are workbooks and samples you can use to base your worksheets(if you use a spreadsheet program) off of and practical advice from the instructor(at least my instructor had been an accountant for about forty years). Things like spotting errors(transposition errors are always divisible by nine by the way, so if you’re off by 81 dollars somewhere check and see if that $290 entry was accidentally written as a $209 entry), tracking equity, etc. are all covered in a basic bookkeeping course. It was something like $30 for a four week course, two nights a week, and that included the materials IIRC.

Once you understand the principles of bookkeeping, then automated systems like Quicken make much, MUCH, more sense and become easier to use and more useful.

Enjoy,
Steven

11

Lifehacker likes Mint.com, but saves most of its praise for Wesabe. I plan on trying it out when I’ve got some time to get started.

12

I’ll second everyone else who said “simplify.” You need one chequing/savings account to deposit income into and take payments out of, one credit card, one line of credit (some would argue just the credit card or the line of credit, and I wouldn’t disagree), one IRA account. All the rest of it is window dressing. I’m getting stressed just looking at your financial list. My husband and I have too many accounts too, and we are in the process of simplifying all the mess. I suspect part of the reason you are having trouble staying on budget is because of the overcomplicated accounts. It’s hard to tell where your money is going when it’s coming and going from multiple different places every month.

I agree that there’s nothing wrong with tracking finances on Excel. I too used to use one worksheet for every month, putting in my monthly expenses and income and just copying to the next month. I used that method to budget paying off my student loans, and had about $14,000 paid off in about a year and a half of hardcore effort. I would get so excited, sitting down with my budget spreadsheets, putting in every expense and seeing how much was left over to apply to the debt.

Oh, another tip about paying off debt - pay when you can. Don’t wait to make one payment a month - when your budget says you have $400 extra dollars, throw it at the debt right then.

13

I’ve been using Quicken for about 15 years also. If you do decide to use Quicken, try using its savings goal accounts as a budgeting tool, instead of its actual “budgeting tools”. If you set up a savings goal account for all your recurring and predictable expenses (e.g. “auto insurance”, “my next computer”, etc), then set up regular transfers into those accounts, it gives you a very clear picture of how much of your income is actually available for discretionary spending.

14

I appreciate all the great advice so far. Keep it coming!

I’m not sure how much I’ll be able to reduce the number of accounts. I actually set up that many *in order to *simplify. I have my own account and the BF has his. This is our discretionary spending money, no questions asked. Only X goes in, and that’s how we keep track of that. It’s also a way of maintaining harmony in the relationship. It works for us.

We have a joint checking where X is automatically deposited every payday, and from that amount things like student loans and savings are paid automatically, so I never even have to think about any of that. I could do this from my other checking (see below), but I found all the comings and goings left me confused as to how much money I had for, say, groceries. This way I never even see the money, and the bills are paid painlessly.

The checking came bundled with a low-interest savings, and so that’s where I stash all of the 1099 tax money, so it never gets mixed up with any other money (i.e., I never accidentally spend it) and I always have enough come April.

The high-interest online savings is the emergency fund–out of sight but easily accessible if something comes up. And the other joint checking is for day-to-day expenses, bills, etc. This way I have a very clear picture of how much spending money we have, and never overspend and wind up short for, say, the car payment. I thought it was a pretty elegant system, myself, but I can see where it would give other people a headache.

The browser-based software looks intriguing, but I just don’t feel good about having my information floating around out there, especially if all my info is in one place. Everyone gets hacked eventually, y’know?

I like the idea about taking a bookkeeping class. It’s the business finances that are really in dire shape, and I’d rather have the know-how to fix it myself than have to pay someone.

I would also love to find some kind of debt tracker software. I have an Excel spreadsheet that tells me exactly what I owe, what interest I’m paying, how long till payoff, etc. But I have to manually fetch this information from a number of different sources every month. So if anyone has any recommendations, I’d love to hear them.

Is it possible to set up Excel to do some auto-calculating like this? I’m not an expert with Excel at all.

Thanks for the help–I’m determined that 2008 is the year I’m going to get my money under control once and for all…it’s just hard to know where to start.

15

If you wanna bust out the big guns you could always go for the basic versions of quickbooks online. Support included, always updated, backed up on intuits servers, accessible from damn near any internet connection.

The basic version last I checked is $19/mo, I use the deluxe version for my business and its great for my tiny little biz.

Its intended for businesses but it can be used for personal stuff too. Learning curve is a bit steep, but once your set up it kicks 8 flavors of ass.

16

GNUCash is free, supports a number of online banking formats, and is pretty comprehensive, I hear. Worth a look, maybe.

Si

17

HEY! I keep track of my finances by making hash marks on a rock with a burnt stick!

In all seriousness, I appreciate that you’ve started this thread, as I going to have to make a great leap forward into the 21st century pretty soon.

18

Well, if you think having so many accounts is helping, I guess that’s good (I’m still a little skeptical, but to each their own).

I would say it probably is quite important to take a financial class for your business (you’ll probably see the knowledge spill over into your personal finances, too). Knowledge is power.

19

I’m trying to get my financial act together too.

Er, I realise it’s a big ask … but would any of you ‘Excel budgeters’ mind sharing your template, please? I have Excel, and am quite handy with it - but I suck at finance.

I’ve been trying to make an Excel budget plan/tracker and I’m finding there’s so much stuff I haven’t thought about until it comes up - I could really use the assistance of someone who’s got a working system in place that they have found works for them.

20

Ooh, yes, please share. I don’t have anything against using Excel as a financial tracker, it’s just that I don’t know how to make it do what I want.

I downloaded a trial version of Money last night and played with it for a while. It looks like it could be really helpful, eventually. Once I learn a lot more about bookkeeping.