Here's a question from my May expense wrap-up post:
For many years now, I have been using Quicken on my Mac at home, and synchronizing it with the Pocket Quicken for Palm OS, which is on my Treo phone.
The desktop Quicken has almost all the features I need-- I can download my credit card transactions and update security prices with single click. I used to be able to download my 401k transactions too, but my provider currently doesn't support that for Macs, so I have to enter them manually. I set up expense categories and budgets, editing the categories and subcategories to things that are meaningful to me. Every month, I use desktop Quicken to run reports on my net worth, how my spending breaks out into categories and how I'm measuring up against my budget.
For daily cash transactions or ATM withdrawals, I enter them in Pocket Quicken as they happen. This is a great way to capture every single penny I spend and minimize the cash that somehow disappears. About once a week, I synchronize my Treo with my Mac so all the handheld transactions appear on the desktop. This also keeps all my balances and transactions on the handheld up to date, so I can run basic reports on my spending vs. budget even when I don't have desktop Quicken handy.
I can't emphasize enough how important the PDA integration has been for me. I've always been a huge fan of Palm devices, and being able to use a neat-o tech toy has made it fun to track my finances religiously. I don't have to worry about jotting down spending on paper, or keeping receipts for everything. Occasionally I'll forget to enter something in the Treo and then be annoyed when my balance is off, but when I'm good, I literally account for every dollar I spend, no matter how minor the expense. I'm worried about the future of this method-- Palm OS seems to be getting phased out, and there doesn't seem to be a Pocket Quicken app for Blackberry. They've recently introduced an iPhone app that syncs with the free online version of Quicken, but that lacks many features of the desktop version. It also seems to be annoyingly focused on younger users who are focused on living paycheck-to-paycheck. I don't want an app that tells me how much I have left to spend before I get paid again, and I don't think that approach should be encouraged! (I realize that living paycheck-to-paycheck is a true necessity rather than a choice for some people, but those people probably aren't splurging on iPhones.) I also find it annoying that the crucial feature of PDA integration would only be available for a stripped-down free version of a program but not the deluxe/premier versions they expect you to pay money for! I hope someone at Quicken is listening and that other PDA/smartphone apps are planned that will work with the desktop Mac version of Quicken.
My method won't be right for everyone, but there are various options you can try. I think everyone should start with some program that at least lets you download or monitor your bank and credit card transactions-- you could use Mint, Geezeo, or Quicken, all of which are free. And then you should find your favorite way to keep track of day to day cash expenses-- if you love using your iPhone or some other device, use that. If you have a favorite kind of notebook, such as a Moleskine (the extra-small Volants are perfect) or the handy little Field Notes books, use that. Someone will likely point out that these name brand notebooks can be expensive and a cheapo drugstore notebook would serve the same purpose-- true, but if the feel of writing on nice paper is pleasurable to you, it will encourage you to jot down every expense, and to me that is worth a few dollars. The point is to do whatever you can to help you form this habit.
Tracking expenses isn't just about compiling a lot of data. I firmly believe that when you see where your money's going, it helps you control your spending and focus on attaining savings goals, and it doesn't have to involve a lot of time or effort. Anyone else have any tips to share on how you track your spending?