How/why do you track your personal finances?

[dmauder]

Just out of curiosity, how many of you actually track your personal finances each month, how do you do it, and why?

In other words, do you actually balance your checkbook and/or credit card account(s) each month, and do you use any software tools such as MS Money, Quicken, YNAB, or one of the bazillions of online money tracking services (Mint, Yodlee, Wasabe, etc)??

I used to track everything religiously in Quicken, but then I started to drift around trying different tools. I tried Money, YNAB, Mvelopes, Mint, Yodlee, Wasabe, and on the list goes...

Needless to say, for the last 10+ years, I haven't tracked anything consistently other than my tax-related investment transactions, and I've used Money to do that. This is only so I can figure capital gains at the end of the year.

I can see the need/want to track investments, but what about everything else? Is there really any point in keeping receipts and tracking every place your money goes?

Speaking of receipts -- that's another good question. Do you save them? Which ones and for how long?

I used to save EVERY receipt, and now I find myself sifting through boxes of them going all the way back to the late 90's. But now, I'm just shoving them into the shredder. Why would anyone need to keep a gas receipt, or a receipt for groceries??? You can't return the stuff!

Dave

[Gemini15]

I think it is a matter of what feels right. If you are quite good at monitoring your spending as you spend it, then all you probably need to do is a quick check of all bank/credit card statements when they come in. Having joint accounts makes this harder and that is where a system should be used so that each couple has play money which doesn't need to be accounted for.

On the other hand if you find yourself where you have no idea where your money goes and are not happy with your financial position then you do need to monitor spending better and have a budget system that works for you. Software programs as mentioned make this easier.

As regards to receipts, keep them all if they are tax related. Keep others for warranty purposes and bin the rest once happy with product.

Hope this helps

[RT Wolf]

I use quicken and use my debit card mostly. I use it to keep an eye on categories (eating out for example is a problematic one for me). I use it mostly to raise my awareness of where my money's going and consciously choosing it, similra to a time log:

Triple Your Personal Productivity by Steve Pavlina

[Jonathan Browne]

It's might be best if you know you wont have the self discipline to track every single thing to only track those purchases you make that you haven't already budgeted for. Ideally you should budget for the major recurring expenses every month. You want to track what your spending on impulse so that you can eliminate those things you really do not need or want enough to make it worth it.

[Rose of Cairo]

I don't.

[enyi]

I have yet to find a compelling reason to track my finances thoroughly.

I used Money in the past, then I tried several web apps (even made one of my own), but in the end I stopped using them after 2 weeks or so...

It just gets too tedious. Plus, I've come to realize that I almost always try to start tracking again when I'm through a rough patch, and I think it's mostly about wanting to feel in control.

What I feel most comfortable with is to keep a reasonable amount of money in the bank. I've found that the amount I feel comfortable with goes up constantly, so at least what they say that "whatever you keep track of tends to improve" seems to be right.

I like to "feel" abundant ;-)

Regarding receipts, I do save the ones I think I might have a use for. For some time I saved them by day (stapled to a sheet with the date), but now I save them by month, and I plan to throw them all a year later.

Let me tell you I've never ever had a need for any of those receipts, but you never know.

- Ivan

PD: My father is wealthy, and he doesn't track his finances day to day. I've heard many wealthy people don't do that either, so that's something interesting to ponder on.

[dreamtime07]

Hi!, I'm a student and I always have my weekly allowance from my parents. Before, I really don't know how to spend my money wisely. Just spend here and there; anything what I want is what I'll buy until I will realize that there's not much left for me to save at the end of the week.

Soon, I thought of starting my finance diary. I put it on Microsoft Excel and jot down all of the things that I bought and paid for everyday. After a week, I review all the things that I bought and sort out all the things that I shouldn't have bought and calculate how much could I have saved if I haven't bought these unnecessary things. This method taught me how to save money and to spend it wisely.

Soon after a year, I stopped tracking my finances everyday. I now just track how much I have saved and how much money have I put on the bank and there. I now know how to spend my money wisely because of recording it and reviewing it at the end of the week.

I've also found a solution to my problem of wanting to buy the things that I want. So even if I just buy the necessary things with my allowance, I'll still be able to buy the things that I want. I do that by setting aside some money like a hundred pesos (currency in the Philippines) every week or just set aside any amount that I feel like every week in my drawer - I call this my LUXURY BANK. Then, when the time comes that I really need money because I want something, I'll just have to withdraw from my LUXURY Bank. and there I have bought what I want.

I can buy the things that I want and at the same time, save more money.

Hope you gain from my experience.

[dmauder]

Thanks for all the great responses. I've had a bit of a revelation since posting my original message....

I've gone back to using You Need a Budget (YNAB) and Yodlee. I was doing this a while ago, but then got away from it and never felt like going back to update things.

So now, I've started a new YNAB file as of Jan 1. If you're not familiar with YNAB, the basic premise is that you operate on a zero-based budget with a 1 month buffer. In other words, the money I make this month is used to fund our budget for NEXT month. Fortunately, we already had a 1 month buffer in our checking account, so I was able to hit the ground running.

The wonderful thing about YNAB is that you can see immediately whether you are over or under on your various budget categories (or envelopes). Overages carry over to the following month, and shortages deduct from the following month. In other words, you always know exactly how much money you have, and every dollar has a job.

So then, Yodlee gives me a dashboard view into all my finances including manual asset accounts such car value, home value, etc. The net worth view is awesome! And the email alerts tell me instantly if anything strange is going on in any of my accounts.

Oh, and I forgot the best part of this whole thing... After I started over with YNAB, there was no reason to keep all my past receipts. I sorted through them, kept out the ones that pertained to home improvements or big-ticket items with warranties -- and shredded the rest. Yes, 3-4 years worth of receipts are GONE!

Dave

[openeyes]

My girlfriend saves her receipts for a couple weeks at a time and then enters them into excel. I've considered this, as I'm finding that being more aware of what I spend on things tends to lead to more focused/reduced spending. Up to this point I've mostly used a debit card and kept enough in that account to not have to worry about it.