Keep Track Of Your Finances To Save Money
Contributed by Trey Sloan
When it comes to money, the best advice is often the dullest. It’s also sometimes advice that we ignore. Among the most boring and best financial advice is to keep your financial records in order. “Balancing the checkbook” can be a daunting task but it doesn’t have to be an unpleasant experience. If your current method of finance management involves sticking receipts in a shoe box and calling it good, then it’s time to reconsider your bookkeeping practices.
The first time you go through the process is always the hardest. Make yourself comfortable and accept the fact that this is something that will take time to complete. The more often you do this, the easier it becomes and the less time it will take to complete. For now, try to consider that taking stock of your finances will save you money. By understanding exactly where your money is going, you can determine the easiest ways for you to start saving.
Over time, you can recognize irregular patterns. When an expense rises dramatically from one month to another, find out why and decide what can be done about it. If you notice that your gas and light bill has skyrocketed over the past six months, there may not be much you can do about it. You can start eating in the dark or turning down the air conditioning but you will find it’s difficult to change how much you pay for life’s necessities. However, if you look at your records and notice that you’re suddenly paying twice as much on Lottery tickets and double lattes as you did two months ago, it is very easy to change those habits. Identifying the areas of waste is a painless way to start saving money. There is no way you can do this unless you have well-organized financial records.
Luckily for those of us who dread the idea of reconciling bank statements with your checkbook, technology has made the entire process a whole lot easier. You may find that with a little training in Excel®, a simple spreadsheet is all you need to take inventory of your spending. However, there are well-developed software packages that can be used with just a little training. Consider purchasing these products. Later you are certain to think of it as money well spent.
Intuit®’s Quicken® product is widely regarded as the best available financial management tool because it’s easy to use, inexpensive, and powerful. Microsoft®’s Money program offers similar features. You will quickly find out that using such a product will save you time and money. Once you learn to use a tool like Money or Quicken, you can manage your finances with confidence and ease. How much are you spending every month on credit card interest? After completing a simple Quicken tutorial, you will know the answer. In fact, with an Internet connection and a finance program like Quicken or Money your PC can actually become all the bank you need.
Accounts can be set up to download transactions automatically. For a small monthly fee, your bank (or Savings and Loan) will send your transaction information directly to your computer. You can pay bills, review transactions, and enter your paychecks into your records with just a few clicks of the mouse. It won’t take very long until you can’t remember how you ever got along with out Internet banking. You can completely eliminate the need to ever set foot inside an actual bank. As your computer skills become greater through training and practice, your computer becomes your banking center.
Today, banks and other financial institutions are sensitive to your security concerns. If your bank or Savings and Loan does not guarantee the security of its Internet banking, find another financial institution that does. Chances are, this won’t be necessary. Nearly all reputable banks guarantee the security of their Internet products in order to keep their customers who pay close attention to their finances.
Keeping receipts is a good practice, but be reasonable about how long you hold on to them. Keep the receipts for your major purchases but get rid of the ones you don’t need. The receipt you bought for your computer is probably worth holding on to, the receipt for the used DVD probably is not. When considering whether or not to save a receipt, a good guideline to use is how long you would spend on hold in order to receive the amount of money the receipt represents. If you are the type of person who would spend an hour on the phone to receive a full refund for your defective toothbrush, then you should keep all your receipts. But if you feel your time is better spent elsewhere, you can toss most of those little scraps of paper that you accumulate.
No one pretends that budgeting and bookkeeping is fun. It takes a little patience and effort. Try to remember that by spending time you are saving money. Besides, trimming fat from a budget can become a game. You can set little goals for you and your family and reward yourself when you achieve them. The better organized you become, the more you can save and the easier the bookkeeping process becomes. Eventually, you will remember that you once kept your finances in a shoe box full of receipts and laugh.
Excel and Microsoft are registered trademarks of Microsoft Corporation in the U.S. and/or other countries. Intuit and Quicken are registered trademarks of Intuit Inc., or one of its subsidiaries, in the U.S. and/or other countries.
About the Author:
Trey Sloan is a writer that has worked in the computer software and telecommunications industries for 12 years.
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