I’m embarrassed to say this, but I have gotten this far in my adult life basically by using my wallet for bookkeeping, collecting receipts and withdrawal slips and using them to keep tabs on how I’m doing. By doing this and putting my 401k and some investments on automatic withdrawal, I haven’t had any real financial crises, but my method hardly gave me the information I needed to really take control of my finances; I’m sure I’ve burned through a lot of money because I didn’t see what I was doing.
Obviously, there are better ways of track finances… so what are yours? Recently, I’ve started tracking expenses on Excel. This allows me to know exactly how I’m tracking receipts but I know I’m reinventing the wheel and will have to keep reinventing the wheel until I find a system I like. I tried Quicken years ago, but at the time it didn’t seem very intuitive; it seemed like I was spending more time reading the help section than I was with actually entering the data (no, I never got far to actually analyze how I was doing.)
Besides format, I’d also like to hear about other bookkeeping methods, habits or what have you.
We use Quicken. It’s not a great program – incredibly non-intuitive – but setting up the basics has been pretty straightforward. The key to using Quicken (or Microsoft Money) is having online access to your banking information, so that you can download your statements directly into Quicken rather than entering them manually.
The procedure is:
Download your latest account information every week or so.
Assign a category label to each new transaction (e.g. groceries, auto-related expenses, utilities, dining out/fun stuff, etc.) – you can easily tell the program to remember that X store always has Y category, so this is usually pretty quick.
Every few weeks, check and see where you’re spending your money. It’s a lot easier to save and/or not overspend if you know that e.g. eating out is where you’re spending most of your extra money each month.
It’s pretty easy and it works for us. You can also make a budget in Quicken, where you just set what you’d like to spend on each category per month, and then it shows you month by month where you were under budget and where you were over budget.
We used Quicken for years but I had to (was forced to) keep upgrading, and after the 4th time (and paying A LOT of money for features I did not use or need) I’ve given up.
Acemoney is attractively priced and gets you a lifetime license. It will handle all the account bookeeping you will ever need, do bill notificaitons, reconciliations, and you can download transactions from your on-line banking service (assuming one is available. It also handles basic investment tracking although I have not used it for this.
Quicken IMHO has turned into an unashamed piece of bloatware, and it’s gotten far worse since '97 when I started using it.
(no disrespect to Giraffe’s opinion, just my 2 cents worth, not adjusted for exchance, no warranty is implied, do not taunt happy fun ball).
I use an Excel spreadsheet to track all investments on an annual basis. That way, you’re ready at tax time. All the tab totals are linked to a summary page that automatically updates the amounts. It’s time-consuming to set up at first, but after that you just cut and paste for the following years. I prefer it to something like Quicken because you can customize to fit your view of things.
Also, just my opinion, but the format really doesn’t matter. You can track your finances through spreadsheets, old time record books, computer programs…the important thing is to use one of the above, or an alternative, and KEEP TRACK OF THINGS.
When my husband and I were first married in 1980, the ATMs were new, as was the idea of taking out $20, $40, $100 at a time in cash. We had no idea how much money we were really spending. After a few years, I started an old fashioned balance sheet kinda thing. How much money was coming in, how much was going out, and where. I moved to an early version of MONEY, then Quicken for the next 10 years. What you use doesn’t matter nearly as much as THAT you use some method. I was stunned at one point that I was spending $400 a month on what I referred to as household expenses. Which was crap, really.
So, if keeping track of your receipts in your wallet is telling you how much money you’re spending every month on what, that’s great. I’m betting it isn’t. Check out other software products, decide which one is comfortable for you and USE IT!!
I’m using Quicken now, but I’m getting kind of annoyed with it. There are lots of annoying little things about it that are making me crazy (I have a car loan that I simply cannot get to work right, for example), plus the required upgrades mentioned by haardvark are kind of irritating, too.
The other problem is that it’s installed on my husband’s computer, and when he’s home, he’s parked in front of that thing, so I can only pay bills if I’m home and he’s not, so I really should get something for my computer. Anybody know of a good alternative to Quicken for Mac?
Chefguy, that’s exactly why I decided on Excel. My experiences with Quicken were that there was too much going on in the background and I didn’t have the power to set things up as I wanted. It may take a small amount of time to set up the macros, but once they’re there, they’re there. Also, I’m new to this game; I know that my accounts and what goes in them will get shuffled around a lot before I settle on a system that works.
In the meantime, I’ll check out Quicken and Acemoney. Shoot, I may try to find time for an accounting class or two; it should pay for itself over time.
wonder9, using my wallet actually gave me a good idea of where my money was going. Come December though, with a years receipts and quarterly reports in there, putting the wallet back in a hip pocket was murder! Kidding aside, I think we’re on the same page with this one.
Another Excel user here.
I have my ledger set up in calendar form. And, I’ve entered all my anticipated expenses well into the future. That way I can see how a given expenditure will impact me so I can avoid the dreaded NSF monster.
Also, I have a great graph which visually depicts my cash level.
Every week or so, I’ll head to my bank’s online center to see what’s cleared and what’s still waiting to hit my account.
Excel is so flexible and customizable, I wouldn’t ever consider using Quicken or Money. I’m literally able to build a house soon with the fantastic control I have over my finances.