Best and most efficient way to keep track of finances?

[jamestl2]

I know I should be, but I don't know quite the best way to go about this, so I'll ask about it to see how everyone else does.

Do you guys just keep a notebook or journal for record keeping? How about just using a checkbook. Or maybe even a database or spreadsheet on your computer?

How about a folder fo important papers? Do you guys keep receipts for everything you purchase? And bills maintained and paid? how much of everything do you keep?

Do you treat your finances like a business? (aka keeping notes on things like business plans, debits, credits, etc.)

Hopefully some smart members here could give me some insight, as I'm still quite young.....

[sheffy4]

Hey jamestl2,
I have a Franklin-Covey personal organizer/planner, and it works pretty well for keeping track of finances. In my planner there is one page of each month dedicated just to expenses. And also, at the bottom of the page for each day, there is a small section for expenses just for that day, so you can add them all up at the end of the month.
When I was forming a budget for myself, I kept track of everything that I spent money on, from a $1.00 cup of coffee, to the hundreds of dollars for rent and bills. This way I could see how much I really spent on food, entertainment, bills, etc, and I could create a realistic budget for myself.
These days, however, I don't save receipts for everything, only big purchases.

[wellbeing]

Hi, James!
I've sworn by the Quicken software for many years (dare I say "decades"?) now. I find it to be simple to learn/use and it does neat things for me like auto-complete entries, remind me when bills or coming and total me spending by categories across payment forms (handy when paying--say--groceries with cash, check and credit card). It comes in several versions; I use one of the more basic versions. I don't need their special services, which I've found cost extra money (both to Quicken's parent but also to my bank) and which allows the product to be "made obsolete" before I'm ready to upgrade on my own.

I collect a receipt for almost everything (so that I post everything) and I'd suggest getting in the habit of posting the expenditures every day (It's not as bad as it sounds; even when I was a super-consumer). The pile does back up so much that way.

About saving the receipts: Unless I need them for tax or resolution reasons, I generally post and toss the cash receipts and toss (shred) the credit card receipts after I've reconciled the statement.

Hope this helps.

[Jennihul]

I don't keep track. I'm just not that interested in where my money goes.

Receipts that may be pertinent come tax time get thrown in a Pendaflex folder in my desk drawer.

I do have an analog spreadsheet of all my monthly bills in graph form. Bills due across the top and months down the side. I fill in the box with the amount that month when the bill is paid with spare boxes for unexpected bills. (I found out I had a slow water leak that way. The amount paid just kept creeping up.) It helps to not forget to pay a bill.

Otherwise, bah. I make more than I spend so I'd rather spend my precious time on other pursuits. People can get really anal and obsessive about money paying too close attention to it.

Jennifer

[InterfaceLeader]

I used to just check my bank balance occasionally, and hope I was still in credit.

Recently I took more control though (especially as I went self-employed, and need to for tax reasons).

I use Cha-Ching which is the best financial software for the mac that I've found, in that it's simple but powerful. It definitely doesn't have the features of Quicken, etc. but for me it's perfect.

I also keep all household bills, and the receipts of goods I am going to claim VAT back on (printers, computer monitor, stationary).

I also keep gas/electricity bills as I can claim some of that back.

In the UK, you need to keep wage slips for 5 years in case the tax people come and investigate at any point.

[fourthdan]

Plain and simple Microsoft Excel / google spreadsheets.
But then I don't take into account mutual funds and stocks that I invest in on a live basis. I just take estimates and place it under "assets"

[5stardreams]

It depends on how big your business is.

If you are a simple $100 per month business, then just using a file folder labeled "receipts" is good enough. Or find yourself a good checkbook system, or use an Excel spreadsheet.

If you make loads of money every month or you are a full-time freelancer, then it's time to break out Quicken or Quickbooks.

The easiest way to do it? Just open up a new bank account for your business.

[dmauder]

Originally Posted by jamestl2

I know I should be, but I don't know quite the best way to go about this, so I'll ask about it to see how everyone else does.

Do you guys just keep a notebook or journal for record keeping? How about just using a checkbook. Or maybe even a database or spreadsheet on your computer?

How about a folder fo important papers? Do you guys keep receipts for everything you purchase? And bills maintained and paid? how much of everything do you keep?

Do you treat your finances like a business? (aka keeping notes on things like business plans, debits, credits, etc.)

For many many years, I kept track of everything using Quicken. I even used the Home Inventory feature. But, little by little, I got sick of the commercialization of the product (lots of ads) and the lack of free support.

So lately, I've been using a mish-mash of various methods for keeping track of stuff. I've always kept receipts, paid bills, statements, etc pretty much forever. A LONG time ago, I read a book called "Home Filing Made Easy" and have been following that simple system ever since. My paper files are still setup the way that book taught me almost 20 years ago.

Lately, I've decided to go "paperless" by scanning everything to PDF and indexing it accordingly. Regular offsite backups are VERY important if you're going to go this route. Right now, I'm using Mozy.com.

It's an ongoing and time consuming process, but I started by doing a HUGE purge. I shredded all receipts, canceled checks, bank statements, etc that were no longer useful. I just couldn't figure out why I still had grocery store and restaurant receipts from 1994.

I tossed bank statements for accounts I no longer have, records for cars I no longer own, utility bills from homes I no longer own, insurance statements for cars I no longer own, etc... You get the idea.

For everything else, I purchased a Fujitsu ScanSnap S510 scanner (highly recommended) and have been in the process of digitizing everything I want/need to keep.

In the end, the only paper I want to have is tax records, paperwork for home(s) I still own or recently sold, and receipts I might need for warranty service or to return something recently purchased.

As I pay bills, they get scanned and indexed. I know... I probably don't even need them, but at least I have an electronic record that takes up VERY little space, and I'm getting rid of the paper/clutter.

A for keeping track of my personal finance/budget stuff, I use and highly recommend You Need a Budget. I've blogged about YNAB a few times, but here is the most recent post if you want to read about it.

So... with YNAB as my tool of choice, I keep receipts until they have been entered and verified in YNAB. Then, if it's a receipt I need to keep for warranty/returns, it gets filed in a small blue recipe card box. Otherwise, the shredder.

Now, having said all that... I haven't been able to find a good way to keep track of my investment portfolio (YNAB doesn't do that). To go back now and enter everything in a new system would take a TON of time, but I'd really like to do it. The best tool I've found is called Personal Stock Monitor, but I haven't really started using it for my actual data. I may decide to tackle one investment account at a time, and enter all my historical transactions. I know, that sounds really anal, but I'd love to have an accurate picture of everything.

Hope that helps answer your questions...

Dave

[jamestl2]

Thanks for the tips so far everyone .

I'm quite new to this so it'll take some time for me to soak up all this information on what to use, sort through everything I need, etc.

I'll check out the different software mentioned out there for this, I didn't realize they could be used for personal finances as well as business finances.

Maybe I hadn't really gotten into this that much because I don't have many expenses (for example, going out with anyone, purchasing gifts for myself, spending my money carelessly, etc. hadn't done any of those types of things).

One more follow-up question here I suppose is: Do you keep your business and personal finances seperate? I originally started the thread based on my everyday money, and hadn't really thought about keeping business records (as I don't have that much right now, except for a few like web hosting and adsense income). I'm assuming this would be a good thing to get into, no?

[Know The Ledge]

I tried the Quicken route for a while, but I really just love having access to my financial information everywhere I go. I set myself up to do my banking and investing at the same place. I also use their online billpay. That way I have all my transaction history and bill payment history online anywhere I am. I also just use a simple spreadsheet (along with email alerts from my bank) to keep track of what bills to pay with each check and so on. You can do the same in Quicken, but I like the ability to log in and see everything.

For access to my spreadsheet I just use Google Docs (there's no personal information in there that needs to be secured).

I also simplified my spending by auto paying a lot of bills to my credit card and basically buying everything I can on the card. That way I only have a couple of bills to pay each month including my large credit card bill. As long as you're paying it off every month (which you should be doing had you paid everything with cash), then it's works in two ways; makes it less bills to pay and allows you to see your spending habits and history online from anywhere that has internet access. Plus, if you're in a rewards program you pile up the points!

There are a lot of options out there, but that has worked for me.

[1000feet]

Originally Posted by jamestl2

One more follow-up question here I suppose is: Do you keep your business and personal finances seperate? I originally started the thread based on my everyday money, and hadn't really thought about keeping business records (as I don't have that much right now, except for a few like web hosting and adsense income). I'm assuming this would be a good thing to get into, no?

I don't, but at the moment all my income is from freelance work and it goes directly to expenses or savings/investments. I just keep separate records of my "work" payments (and I could do the same for expenses if I had any) so I know how that's doing. If you have a more complicated business you probably would want to keep separate accounts so it's easier to tell which way the money is going, but the most important thing is to have records.

[smartile]

jamestl2,

I've been using the JARS System for 18 months. It's phenomenal and easy to use. My wife and I have effectively used this system to:

- increase our net worth by 45% in 12 months,
- put money away for our Whistler Ski trip,
- have more fun spending money.

[Red Willow]

Here's what I do.

I have two checking accounts--one for personal use and one for bills. I have all my bills on automatic bill pay, so every month, I make one big deposit into my bill account--that way I don't have to worry about it at all. I check the account every few days to make sure I have enough in there to cover my bills--sometimes something goes over.

After I've also allocated money to various savings accounts, stock accounts, etc... what I have left in my personal account is fun money. I don't really keep track of it, I just try to stay in the black on the account.

My real issue is keeping my husband under wraps. He is a baby with money. He will keep spending until the card is returned. So reigning him in has been a challenge. I've tried to give him a cash allowance every month, but that didn't work. He still ended up using the debit card.

Now, I've gotten him a small-limit credit card that I pay off every month, but he still always goes over the limit and that's not good for our credit.

What I've found that works best for us is to spend from the personal account within reason and set up overdraft protection.