Thursday, June 12, 2008

The Perils of Extreme Expense Tracking

As I've probably mentioned ad nauseum on this site, I try to track every single penny I spend and earn. If I pick up a dime, I enter it under the miscellaneous category as Found Money. If I spend a dollar on a cup of coffee, I enter it under the dining category as Coffee. There is very little I miss entering, but of course I am not perfect and sometimes I have to reconcile my cash on hand against what Quicken thinks I have and enter a balance adjustment. But still, I'm pretty accurate: for all of 2007, I had to enter 27 balance adjustments, whose net total was actually $6.02 in my favor.

Given this degree of accuracy, I find it rather infuriating when I am tracking my cash and suddenly see large chunks of it disappear. Just today I had to enter a balance adjustment for -$11.45. Where did that money go? I seem to have accounted for all my lunches and breakfasts and dry-cleaning, and other than that, I just don't spend cash that often. What's worse is that I had to put in another balance adjustment for -$13.09 less than two weeks ago. That is a fairly large amount of money for me to lose track of over such a short period of time.

Either I'm just getting forgetful as I approach those perimenopausal years (ugh!!), or I'm not noticing that people are short-changing me, or someone is sneaking into my office and stealing money out of my wallet while I'm in meetings! Whichever it is, it's starting to make me a little paranoid!

14 comments:

Anonymous said...

I have a lot of loose change that constantly builds up in my purse until I transfer it all to a jar or something until some magical day when I have the energy to roll it all and bring it the bank....maybe the spare change is your problem. Do you include that in your cash on hand?

Chad @ Sentient Money said...

@Anonymous - Many banks to accept rolled coins anymore, so make sure yours does before you roll them up. Most just have counting machine. Mine does it for free if you have an account with them.

Chad @ Sentient Money said...

Wow! Could my typing be worse? My last comment was terrible.

It should be - "Many banks don't accept rolled coins anymore, so make sure your bank does before you roll them. Most just have a counting machine. Mine does it for free if you have an account with them.

Madame X said...

Anon 9:32-- I don't keep a spare change jar. I try to pay with exact change whenever possible, so the coins in my wallet are the only ones I have, and I do track them. I also track a separate stash of laundry quarters.

Middle Class Hick said...

I usually pay credit card for everything that I can - this way I don't have to carry change with me. I get spare change lying around and roll them once a month (Saturday morning is personal finance day at home, pay bills, do what ever) and then I have them sit around until I take them to the bank. I agree with Chad - most banks are pretty lousy at taking change - so I take them to Kroger as well .. they will take them. So I pay dollars in a roll of quarters and another 100 on the credit card. Same thing, just gets rid of the change in my house.

Steward @ My Family's Money said...

I wouldn't be too worried about even those 20 something odd dollars you had to adjust for - I mean it is only a fraction of a percent of the amount that you spend in an entire month. However, I have only come to this conclusion after spending hours pouring over my own money tracking spreadsheets trying to reconcile them for similar mistakes. It is fun to have them line up perfectly, but those 20 minutes to an hour (an hour!) trying to reconcile an error that equates to less than a percent just doesn't make any sense. My time is better spent trying to do something more life expanding.

lawyer mama said...

This happened to me, too, recently. I lost track of $26. (I only track whole dollars. I round up when using change. I use change for parking meters, which I don't track).

Anyhow, the lost $26 is really bugging me. It happened over a single weekend, and I keep going over the weekend in my head, trying to account for it. It had been a total of $36 lost, but in thinking it over again and again, I remembered some of the expenditures.

Let's try to put it behind us, though. I think steward is right about the value of the time spent agonizing over a few dollars. I will resolve to keep trying better in the future, though!

Anonymous said...

I second the opinion that it's not worth getting upset over it. That's why I don't micro-track my expenses. I find that when I started doing that, I do get obsessed when things don't balance and it's a waste of time and energy. I just weigh every purchase and expense on its individual basis on need, want and affordability. I find it's much easier that way.

sandyvoice said...

I can't agree with all these folks who are casual about their pennies. There were many years I didn't track every cent, and in those years, I was essentially impoverished. When I started to really pay attention, that's when I started to get out of debt, and started being able to plan for the future. It's true that $13 doesn't sound like a lot, but if you think of what you could buy with it, like enough pasta and sauce fixings on sale to make dinner for two months ...

Deby said...

Wow, I thought I was the only one who had convulsions when my cash account in Quicken doesn't balance out to the penny! I had to do a balance adjustment a few months ago for about $11, too, and it drove me nuts!
I keep track of my cash purchases througout the day in my PPA (pesonal Paper assistant,but not a moleskin, sorry) and then enter it into Quicken when I get home. This usually works pretty well, but when we're out all day running errands it's easy to miss one or two things. I've learned you've just got to roll with it. Although, I, too, have a tendency to immediately suspect someone's robbed me, I guess I get a little paranoid.

Anonymous said...

I started using Quicken about a year ago and a few months after starting to use it I began doing the same thing - keeping meticulous track of my cash spending no matter how small the amount. Typically when I buy something I just enter it into my smartphone which I always have on me. Then enter it all into Quicken at the end of the day. I initially planned on just doing it for a couple months to get a sense of where I spend my cash but now its been almost a year and I'm still doing it. It just became a habit. The odd thing about it is that I would normally be the last person you'd expect to do this because I am very unorganized in everything and never keep any records for the most part.

It has been nice having an accurate record of where my cash is going but at the same time it is a bit useless to keep doing it. I want to stop and "break" this habit soon. Unless your cash spending is a big portion of your income this is just a waste of time. My cash spending is less than $1000 a month and my income is over $20k a month. At the end of the day even if I cut my cash spending my 30% it isn't going to change anything in my financial health.

Fabulously Broke said...

Ditto. I usually find it's because I went to a store and forgot to get the receipt or note it in my PDA that I spent it

bugbear said...

Well, if I made 20K/monnth I could see letting the cash expenses ride.

But really, isn't it pretty simple? You just keep a receipt every time you spend money. Whether it's with your credit card, a check, electronic payment, whatever. Mark on the receipt what form of payment it is so you don't have to decipher it later on from the last 4 digits of a credit card #. Put the receipts in a jar by your computer and enter them once a week into your financial program.

If it's an expense that doesn't come with a receipt, like a small cash expense or an online payment, just grab a slip of paper and make up your own receipt! "8.26 cash starbucks" or "-415.76 checking to Chase VS".

Again, all receipts go in the jar by your computer, and then every week or so punch them in.

If balancing every $6 discrepancy bothers you, don't! just enter an adjustment every once in a while. But the spending log is invaluable for any number of reasons in my experience.

(Quicken is utterly horribly inefficient for this in my opinion though. I use a customized spreadsheet that's adapted to the information i need, and only that information, so entering the data is the matter of literally four presses of the tab key and it's arranged in the order that *I* want, not what somebody at Intuit wants).

bugbear said...

It's probably worth keeping in mind the larger purpose of tracking your income and expenses, which is just to get good information so that you can control your budget and plan effectively. Slipups that are under a certain amount are really unimportant, as you can always get better in the future at recording things. The key fact to keep in mind is that you are ahead of the game by habitually keeping accurate tabs on things. Balancing your individual accounts should not be an obsession, just a regular habit of behavior, like making out your monthly budget is and going to the bank is.