Personal Finance

Screenshot of my Quicken 2013

PERSONAL FINANCE - it's either the phrase the masses dread and are intimidated by or the phrase some believe to have perfected.  I used to think the latter, that I was on top of my finances just because I was a disciple of Dave Ramsey and that my checkbook hasn't bounced since college.  Well, I was WRONG!  

First, Dave Ramsey is great and I understand that Credit Cards are the slippery slope to financial burden that will keep you awake with worry at night.  I also understand that that carrying cash makes a person spend less so it's preferred.  Budgeting is the way to go.  Finally, it's also logic to take on as many jobs, sacrifice a vacation or two, and spend less to pay off the rolling snowball of accumulated debt that the average American owes to their creditors.  This is the gist of Ramsey's book, The Total Money Makeover.

So the book was given to us twice: once as a wedding gift, and the second as a house warming gift.  I was devoted to Ramsey's model of paying off debts, paying with cash, and keeping a budget with his envelope system - but it got extremely messy and cluttered that it made me give up with the whole thing.  Everything just seemed so primitive, manual, labored.  To me it wasn't wholesome - it didn't show the big picture.  

While his method (I even tried the membership with an online map to financial freedom) may work with some people - it just wasn't for me.  Of recent, I felt compelled to purchase Quicken to organize our finances.  It was the number one thing on my Christmas Wish List and I finally got it.  Huzzah!!!  By far the BEST personal finance software that EXISTS in the market.  I tried mint.com but cancelled the free account immediately since my non-negotiable "Reconciling Accounts" wasn't offered.  Getting back on topic... yes... BEST PERSONAL FINANCE SOFTWARE EVER!!!!  It's very user friendly.  It pulls up all your bank transaction, categorizes them into specific income or expense accounts, create a budget, enter bills, reconcile at month end, run reports, and etcetera, etcetera, etcetera.  The BIG picture was right there and it was shocking to see how frivolous we've been with our spending.  

What I learned from our spending trend:

1. We spend WAY too much at the grocery store.  Perhaps $500 a month worth of formula/milk/baby food/baby stuff was one of the culprits, but we decided to cut 50% of the cost and buy only the necessities - to stick to our list.  We also decided to shop at a cheaper grocery store (not WalMart).  Baby also started eating more solid foods so that should cut down the grocery budget.
2. We dine out too much.  Whether it's Subway, Panera, or Jimmy Johns for a fast grab and go work lunch - it all adds up.  Cutting that nasty habit and bringing lunch to work would definitely help.
3. BUDGET BUDGET BUDGET!!!  To see all expenses laid out and budgeted makes the world a sunnier place.      Wow... there's extra money?! Say what?!       There's also more costs to cut to pay off debt.  It's amazing how it can turn everything around for the best. 
4. Keep EVERY receipt and track them in the software.  

Basically it gave a glimpse of our erratic spending which allowed us to make changes to take control of our finances.  In the past we got by - but there was always that lingering worry that accompanies financial insecurity.  Once we saw the big picture, there was money left over to ease the worry.  It just takes a lot of planning, effort, and perspective.  Everyone should be financially organized.  The time put into it is worth it.  It just surprises me that it took me this long to organize life.  Never too late to start either.

Interesting thing that happened this week: there were two suspicious transactions that were made in my debit card both amounting to about $100.00.  Got that taken care of quickly.  Damn people with their identity theft and credit card fraud.  I need to be more careful.  Next on my wish list is an RFID Wallet.  If only they made one that looked decent and fashionable.