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Old 11-08-2010, 03:18 PM   #61
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I manually track all expenditures and account transactions to the penny. The reasons are:

1) It allows me to check the accuracy of my financial institutions' numbers

2) It allows me to update accounts immediately. Balances are never off while waiting for a check to clear or an electronic transaction to go through

3) It subconsciously encourages me to spend less
4) It lets me know when I need to check under the car seats & floormats...
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Old 11-08-2010, 03:40 PM   #62
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4) It lets me know when I need to check under the car seats & floormats...
I resemble that remark, sir.
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Old 11-08-2010, 05:01 PM   #63
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I spend 1-2 hrs/week entering data in Quicken. I agree with others that this gives me an intuitive feel for our financial situation. I hope for the day when I feel financially secure enough to stop tracking expenses to the penny. Until then the benefits I see of using Quicken are:

1. Precluding mistakes from our financial institutions. (To be fair, I've never seen a substantial one.)
2. Optimizing within budget categories: contributions, groceries, and dining out are 3 areas that we have/will adjust depending on our financial situation.
3. Quickly looking up past transactions: Is it time to pay for the annual service contract again? How much have I given to that charity so far this year? How much was the water bill last quarter?
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Old 11-08-2010, 05:38 PM   #64
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Heck, a look at my waistline tells me we buy too much groceries. Seriously, I guess I still don't understand what the tracking gets you. We try to be good shoppers, so at that point, what good does it do to parse out that X% was 'groceries'? What are we gonna do that we aren't already doing? If we were happier with cheaper/less stuff, that's what we would buy.
There are a couple of different things going on in tracking spending.

From a budgeting standpoint, there are a couple of schools of thought.

Years ago, I read an article

Limit spending to 60% of income and save more - MSN Money

The basic idea is that you take savings and investments off the top for example and it doesn't really matter what you spend your money on as long as you don't go into debt and save what you want to save.

Theoretically I agree with this. If I think I can afford to spend $X a month on non-committed expenses it really doesn't matter whether I spend $X on traveling, or on e-books, or on pretty clothes, or whatever.

If you really, really believe this then a case can be made that you don't really need to track individual expenditures because it doesn't matter what you spend it on as long as you don't spend too much.

I agree.

At the same time, however, most of us don't have unlimited funds and we need to plan our spending. Some people call it a budget. It doesn't matter in the end if I spend $100 this month on books or if I spend $100 on dining out. It matters a great deal, however, if I spend $100 on dining out and that extra $100 means that I go into debt or I don't have money to pay for the car repair that just showed up.

The budgeting program I use (YNAB) starts from the position that each month you give every dollar a job. You might give some dollars the job of being saved for retirement, others to pay the mortgage and others to spend on dining out. You also need to foresee the irregular expenses that either don't come regularly but are fixed (annual property taxes for example) or that are very irregular but not fixed (that car repair).

If I have a set amount of money that I want to spend each month it is helpful to know what I've spent in the past as that helps me to foresee future spending. For example, I tend to underestimate home repairs. I am always optimistic going forward. Yet, when I look back I realize that last year I spent $3000 on a well repair and another time there was an AC repair, etc.
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Old 11-08-2010, 06:49 PM   #65
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I might be misunderstanding your post, but in Quicken you setup an account for each credit card and enter or download each transaction into the credit card account, giving you the itemization. Payments to the card account are recorded as a transfer from your checking account (or other account of your choice) to the credit card account.
Yes! What was I thinking? You can tell that I have not used this kind of program to its full utility.

Yes, my wife has been logging in online to our AmEx account to check posted expenses, but I never pay any attention (I do have access to our banking account, as it is my job to refill that) . And I am sure Quicken can automate the download of the credit card transactions

The question for me is whether my wife will like to use this instead of her own method. I will set it up and spend some time with it, to see if I will have problems like T-Al described earlier. No need to hear my wife's sneering that I try to fix something that ain't broke.
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Old 11-08-2010, 06:53 PM   #66
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... For example, I tend to underestimate home repairs. I am always optimistic going forward...
Yes, I underestimate all kinds of expenses...

Until I get my act together on the expense tracking side, I will just keep working part-time to maintain a slush fund...
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Old 11-10-2010, 04:23 PM   #67
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No correlation at all. I have a well defined budget set by the amount I have automatically deposited in my checking account each month. As long as I stay within that, I meet my goals. Regardless whether I spend it in category X,Y or Z. And that is what I did my whole working life also. Money went into savings, 401K, etc and we lived off the remainder without micro-managing the budget, and after a while we generally had a surplus to put into savings.

Maybe others find the micro-managing to work better for them, but I'm still looking (beating?) for examples of how it helps (or maybe it is just a preference?).

-ERD50
ERD50 - this might start to get at the heart of why you don't think these programs would benefit you. I am the same way. I save first, and then I "allow" myself to spend what is leftover. So I don't really "budget", I just have a savings target. But many people can't/don't operate that way.

As you know, LBYM is hard for the majority of the population. Knowing all the details and keeping better track of where all the money goes can really help. I can mentally keep track of when we've been going out to eat too much, and change our behavior for awhile by eating in, but not everyone is that tuned in to their finances. Most people would say "I don't know where my money goes".

I used Quicken for about a year, once, and then gave up. I have a spreadsheet for retirement projections and keep track of my NW on a monthly basis. Annually I update my retirement projections based on what actually happened to my account balances. These things don't necessarily need as much analysis when they sort of work on auto-pilot.
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Old 11-10-2010, 10:56 PM   #68
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The problem with a "smart" program that does everything---is that it does whatever the heck it wants to do, and you have no clue as to what's going on inside the box. I tried Quicken many years ago and was totally frustrated with it.

Yeah, some people are what you might call anal-retentive about keeping track of everything to the penny. Unless you are running right on the ragged edge of poverty, that doesn't really get you anywhere, IMHO. You can get so bogged down in minutia that you can miss what's really important--the big picture. Maybe some people need to know things to the penny. But what does that gain you?

Do you really need to be able to look back and see that you paid $21.47 on that shirt five years ago? Who the heck cares, and what substantive decision can you do with that level of detail?

Before I retired I was a programmer. Things like Quicken tend to focus on minutia and pennies because it's free. A computer can keep track of expenses down to 4 digits after the decimal point as easily as whole dollars. But that's silly. It can drive you to beleiev that keeping track down to the penny is important. It's not.

Pencil & paper never loses data to a hard-drive crash, never has a problem with incompatable upgrade, works even if the power is off. And it has the clear advantage that you can EASILY SEE what's going on.

It is simple and easy and transparent to keep track of major cach inflow/outflows, and the balances of all your various accounts in a simple Excel spreadsheet. Once a month I log onto all the accounts to get the balances and enter them in the spreadsheet. Takes me all of 30 minutes. And I don't enter pennies or even whole dollars. For record keeping purposes I round to the nearest ten dollars.

And I don't spend any time or effort in fighting anything about how to account for $0.12.
Oh, and once a year I log into each of the credit card accounts and download the previous 12 months transactions. Should I even have the need to look back for an expense, it's all there.

Life's too short to spend much effort on trivialities.
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Old 11-10-2010, 11:24 PM   #69
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ERD50 - this might start to get at the heart of why you don't think these programs would benefit you. I am the same way. I save first, and then I "allow" myself to spend what is leftover. So I don't really "budget", I just have a savings target. But many people can't/don't operate that way.
Interesting, I don't have savings targets: I buy what I need, some of what I want, and anything left over gets invested. It so happens I'm pretty frugal and wind up saving a fair amount, but I'm often not sure of the spending details. So if I notice the money isn't piling up as fast as usual, it's nice to go to my GnuCash records and see what categories have been slurping cash for the last few months, or year, or whatever.

This leads to minor epiphanies like "Maybe I shouldn't buy berries every time I grocery shop," or "I need to hike more, I've been spending too much time at the mall buying clothes."
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Old 11-11-2010, 12:48 AM   #70
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The problem with a "smart" program that does everything---is that it does whatever the heck it wants to do, and you have no clue as to what's going on inside the box. I tried Quicken many years ago and was totally frustrated with it.

Yeah, some people are what you might call anal-retentive about keeping track of everything to the penny. Unless you are running right on the ragged edge of poverty, that doesn't really get you anywhere, IMHO. You can get so bogged down in minutia that you can miss what's really important--the big picture. Maybe some people need to know things to the penny. But what does that gain you?

Do you really need to be able to look back and see that you paid $21.47 on that shirt five years ago? Who the heck cares, and what substantive decision can you do with that level of detail?

Before I retired I was a programmer. Things like Quicken tend to focus on minutia and pennies because it's free. A computer can keep track of expenses down to 4 digits after the decimal point as easily as whole dollars. But that's silly. It can drive you to beleiev that keeping track down to the penny is important. It's not.

Pencil & paper never loses data to a hard-drive crash, never has a problem with incompatable upgrade, works even if the power is off. And it has the clear advantage that you can EASILY SEE what's going on.

It is simple and easy and transparent to keep track of major cach inflow/outflows, and the balances of all your various accounts in a simple Excel spreadsheet. Once a month I log onto all the accounts to get the balances and enter them in the spreadsheet. Takes me all of 30 minutes. And I don't enter pennies or even whole dollars. For record keeping purposes I round to the nearest ten dollars.

And I don't spend any time or effort in fighting anything about how to account for $0.12.
Oh, and once a year I log into each of the credit card accounts and download the previous 12 months transactions. Should I even have the need to look back for an expense, it's all there.

Life's too short to spend much effort on trivialities.
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Old 11-11-2010, 07:12 AM   #71
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The last few Posts, bring to mind the thought that this subject is very similar to that constant struggle most of have with weight control. Sure there are those who seemingly can eat as much of anything they want and stay forever skinny thin but there are others who must control every mouth-full taste and are still "overweight." So there are those who require help (perhaps in the form of a computer program like NutriBase) and those who believe that personal weight gain is proof of some mental defect. Thank goodness most of us are somewhere in between.

There are those of us that can seemingly spend to their heart's content without upsetting the Apple Cart and there are those who shouldn't be allowed anywhere near a checkbook/credit card. Most of us are somewhere in between... thank goodness.
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Old 11-11-2010, 09:02 AM   #72
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One thing I have pointed out before and want to stress again here is that LBYM'ers usually do not need to budget to the last dollar of expenses, when they are still working and still have earned income. But when they retire, living beneath the reduced means may require a bit more care. And when there's talk of the possibility of 2.1% SWR in the coming decades, higher taxes and means-tested SS, can one be too careful?

Just a viewpoint of a sloppy expense tracker...
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Old 11-11-2010, 10:21 AM   #73
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The last few Posts, bring to mind the thought that this subject is very similar to that constant struggle most of have with weight control. Sure there are those who seemingly can eat as much of anything they want...
I don't think that analogy is appropriate as you present it. This isn't about how much you eat or spend, it's about how you maintain a specific, defined number over the long run.

If you are going to diet, there is probably a set amount of calories you need to stick to. Pick a number. Now, maybe some need the help of a program to get the amounts/calories of what they eat to match up to that, and maybe others have been doing it so long that it has become second nature to them. Even to the point of "I'll have that extra slice of cake today, and make adjustments the rest of the week".

In fact, when I successfully lost weight. I just mapped out how many calories I could have at each meal and snack. Then I did some studying to learn what size portions of the various foods I ate would add up to those calories. But once I got a handle on that, I never tracked it, I had the big picture. Worked for me. But I put it back on because I just got tired/lazy of thinking about portion size at each meal. And my wife is too good a cook! And I'm weak.

So this has enlightened me a little. I can definitely see where someone just starting out, or with a major life-style change might need to track very closely to learn to maintain a new number or adjust to new circumstances. I made a pretty detailed budget for myself when I first started out. Though I don't recall tracking it in great detail, it was more for awareness that yep, I could pay the mort/rent, utilities, buy meals gas, insurance, put some in savings and have ~ $X left for fun and misc. But I don't see the benefit for someone who has managed to stay within a set budget for a long time - I guess I really am pretty much on 'auto-pilot'. If circumstances are different, it probably makes sense. But I guess it does surprise me that people who would appear to have been doing it a long time, still find it necessary to track at this detail level. I really wonder if it isn't just inertia.

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Old 11-11-2010, 10:31 AM   #74
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One thing I have pointed out before and want to stress again here is that LBYM'ers usually do not need to budget to the last dollar of expenses, when they are still working and still have earned income. But when they retire, living beneath the reduced means may require a bit more care.
Again, maybe just my personal circumstance, but my overall expenses didn't really change much after retiring. Health care went up, a few other categories went down, no major shift. Again, personal, but if retiring would have required a major budget cut, I wouldn't have done it. That might be the absolute right choice for others (and I would do it under different circumstances), and some may not have had a choice. Gotta do what ya gotta do.

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Old 11-11-2010, 11:14 AM   #75
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If you are going to diet, there is probably a set amount of calories you need to stick to. Pick a number. Now, maybe some need the help of a program to get the amounts/calories of what they eat to match up to that, and maybe others have been doing it so long that it has become second nature to them. Even to the point of "I'll have that extra slice of cake today, and make adjustments the rest of the week".

In fact, when I successfully lost weight. I just mapped out how many calories I could have at each meal and snack. Then I did some studying to learn what size portions of the various foods I ate would add up to those calories. But once I got a handle on that, I never tracked it, I had the big picture. Worked for me. But I put it back on because I just got tired/lazy of thinking about portion size at each meal. And my wife is too good a cook! And I'm weak.
And that is my point. Dieting (for most of us) is much, much more than counting calories -- and if you listen to, for instance, the Atkins folks -- that isn't even an important facet. The food you eat is made up of a kagillion things that need to be tracked and learned about understood before long-term success -- vitamins, minerals, protein, fat, carbohydrates, etc., etc. -- read as "before going on auto-pilot" (again, most of us). Just as the money we spend is made up a kagillion separate transactions.

The proof is in your statement: "But I put it back on because I just got tired/lazy of thinking about portion size at each meal." What was it Hemingway said? "Slowly at first, then quite rapidly." I suspect it is easier for any one of us to make corrections in the "slowly" stage than in the "rapidly" one -- laziness aside.
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Old 11-11-2010, 01:39 PM   #76
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The proof is in your statement: "But I put it back on because I just got tired/lazy of thinking about portion size at each meal." What was it Hemingway said? "Slowly at first, then quite rapidly." I suspect it is easier for any one of us to make corrections in the "slowly" stage than in the "rapidly" one -- laziness aside.
Agreed on the first part, but on the second, whether weight or budget, I look at my account balance every month, and do a quick pencil-paper projection, or I get on the scale (or notice where my belt notch is), and I know I'm out of whack. I knew I was gaining weight and I knew why (I was eating too much). I chose not to bother, I just wasn't motivated enough to stay on my auto-pilot NOR to micro-count calories for each meal.

If I were motivated, I would need to look at corrections. Maybe counting each calorie or each purchase would have anticipated it, maybe not - I'm trying to figure if the micro-accounting is worth the effort.

I guess it's like that old parable of someone walking and looking down carefully placing one foot precisely in front of the other, versus the other guy that looked ahead at a tree for reference, and walked towards it - which one walks a straighter line, or gets to their goal first?


Again, to each their own, whatever works for you, etc. My intent was to learn how these things work for people to see if I was missing out on something, and I don't feel I am.

-ERD50
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Old 11-11-2010, 02:18 PM   #77
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sorry I haven't read the whole thread..

Quicken has a little used feature...

You can buy it every year to get the upgrade, and then request a refund a day later if you are not 100% satisfied.

The amazing thing, I've only been 99% satisfied for my last several upgrades.
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Old 11-11-2010, 04:31 PM   #78
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sorry I haven't read the whole thread..

Quicken has a little used feature...

You can buy it every year to get the upgrade, and then request a refund a day later if you are not 100% satisfied.

The amazing thing, I've only been 99% satisfied for my last several upgrades.
Ummm . . . You don't really do this, do you?
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Old 11-11-2010, 06:01 PM   #79
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I think this thread may answer what some retired people do all day

I used Quicken about 10 years ago and thought it kept a good record of regular company stock purchases... recently I had to revive the old file to write-off the now worthless shares, so that tracking didn't help me make a better decision. I also thought the auto IRR calcs were cool. However, now I only do year end summaries so I can cope with the IRR single cell calc (per fund/share) in a spreadsheet.

Bank of America doesn't do much well, but it has an online budgeting app that allows you to categorize expenditure of bank of America accounts (no importing for us) and make pretty graphs. I did this for 6 months a while ago and found out what I already knew: discretionary expenditure was too big. Unfortunately, this did not help me make better decisions either.

I suspect that there may be a high correlation between better trackers and better budget managers... not necessarily the converse
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Old 11-12-2010, 05:42 AM   #80
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We have been using Quicken for years for both all of the checking accounts and our investments. Have stayed with it despite some of the annoyances. We are still using Q2006. Does anyone have a easy way to convert VG funds to Admiral. Maybe that is an option on later versions?
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