Thursday, February 01, 2007

My Finance Tracking System

After thinking about how I would track things, talking with my mother in-law and trying out a few finance tracking program demos, I decided that a semi-manual approach was the best for me.

First of all, I have 12 separate envelope folders marked January through December. I have a monthly budget worked out on spreadsheet, and I print one out and glue it to the front of each envelope.

The budget form has the projected budget and space to the right to list the actual expenses. As bills come in, I pay them, mark their date and payment amount on the spreadsheet and file the receipt in the folder.

At the end of the month I access my credit card and bank statements online, print print them and pull other assorted items out of them putting them down in the expense side of the paper. I then file those statements in the folder.

When the month is over I will take the envelope to the computer and input my expenses into my spreadsheet and this way I will have everything calculated and ready for trend analysis and an end of the year roll-up.

The various budget or money tracking software I tried were more than a bit cumbersome to use, and they sort of required me to enter the transactions into the computer as they occurred. (otherwise they it would be very hard to do it later)

This way, I get to write out checks while I eat at night, take simple notes on the front page summary and enter them into the spreadsheet all at once...when I have the time. The hand-written page still gives me a sort of "snapshot" of my activity during the month as I go there is no worry about losing sight of my spending.

I have only done this for a month...and only a couple of weeks in reality. I like it so far...and everything will be in one place at years end.

So good.

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Blogger moonfever0 said...

My advice would be to enter as you go. At the end of the month, you'll have such a big pile of stuff that it may cause you to procrastinate, and it doesn't take much to get months behind. I track even cash expenditures to the dollar and if I don't enter within a week, I will forget what the money went towards. It will inevitably end up as "Mystery money" under the "Entertainment, gifts" category, equivalent to simply throwing it away. I also charge everything I can, so that it is easier to track, and I've gotten my cash spending down to less than $100/month (last month was $20!).

Also it may help to go light on the paperwork. I used to print my expense spreadsheets for each month and put them in my planner, but for the last 10 years or so, it has been completely electronic. I only keep receipts until I get my statements and only keep the last utility bill since the rest are documented in the spreadsheet. Having a ton of paperwork that isn't related to taxes simply adds clutter and unnecessary storage issues. (2 cents from the anal retentive budgeter).

10:14 AM EST  

Sounds like a great system.

3:38 PM EDT  

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