4 Ways I Use Quicken to Stay On Top Of My Money
I have long used Quicken to stay on top of my money. I love it for a lot of reasons even though I would never consider myself a power user. Because of that, I only upgrade when Intuit threatens to stop supporting the version I’m using (currently 2014). Here I’ll share with you some of the ways I use Quicken to stay on top of my money and grow my wealth.
Image Credit: Tristan on Flickr
In this post, I’ll focus on four main strategies I follow when using Quicken and how they benefit me. None of this is time consuming but the time it does take is well worth it and has helped me sleep well at night for many years.
There are a lot of right ways to get the job done and Quicken is just one tool. I’d love to hear your thoughts on how you use it or any other tool that helps you stay organized and focused on building your wealth. So read on and then share your thoughts in the Comments below.
Strategy #1: A Consolidated View of All My Accounts
These days, it’s not uncommon to have a savings account here, a checking account there, the 401k somewhere else, a few savings bonds in the safe deposit box, etc. I had a hard time remembering where things were and the current value of each. If you let things go unattended for too long you run the risk of having your money escheated to the state (that means it’s a lot harder to get it back!).
Sure, you can use a simple spreadsheet or a pad of paper to keep track of where everything is and update balances from time-to-time, but that becomes more labor intensive as you begin to grow your wealth. Quicken makes it easy to see everything in one spot, which is why I like it.
One of the thing’s I do is to group my assets so it’s clear what is for spending and what is not. Here’s a screen shot of my Quicken account list…
You can customize your account list any way you want but I break mine into three distinct groups:
- Banking: This category contains accounts that hold money that is likely to be spent. My checking account, any account that holds “future capital expense” money, emergency money, etc. And, it also contains my credit card accounts.
- Investing: This category contains accounts that hold money (both retirement and non-retirement funds) that will never be spent. Yes, I meant to say that…never be spent. These dollars are my employees who will work for me when I can’t or no longer wish to work. Without them you’re stuck working for the rest of your life.
- Property: This category only contains equity in real estate that is guaranteed. You notice that you don’t see cars, jewelry, or anything else that many consider an asset. Even though Quicken allows you to build these “assets” in, I don’t because to me they are not assets, they’re just nice to have liabilities. (I like Robert Kiyosaki’s definition of assets and liabilities.) I only track a very conservative value for the equity in my home and I do this because it is part of my overall wealth plan (but that’s a subject for a future post).
When you do this, whether in Quicken or some other method, you make it easy to track how you’re doing toward your longer-term goals. I wrote a three-part series on why it’s important to set a 10-year plan and how to do it. Click here to read more on that.
Strategy #2: Never Worry About Having the Money to Pay Bills
I use credit cards for the benefits (cash back
or miles) but I religiously pay the balance off in full each month. The problem is that you usually have more charged to the card than is reflected on the statement. That can make it difficult to not overspend and cause you to come up short. I’ve customized Quicken to make sure that I can pay off every cent charged whether it’s on the statement or not.
But first, a word about Categories…
Quicken uses Categories to help you track your spending. You can customize them so that you are able to track your spending to a budget or, if you hate budgets, you can pull a monthly report to see where all your money went. I love this because I have a target budget and can track to see how I’m doing.
First, I created a Temporary Hold category that lets me squirrel away the money I need to pay my credit card charges even before they come due. Each time I make a charge, I record it in the correct credit card account. I then go to my check register and add that amount to a line I keep running to pay off the amount in full. Here’s an example:
The total amount deducted from the check register is the entire outstanding balance in the credit card account. Nice. Now I know that I never have to worry about being able to come up with the payment.
This second step isn’t necessary but makes it a lot easier to find your Temporary Hold entries. When you are in your check register, click in the field where you enter your check number and choose Edit List. The Edit Num List box appears. Choose New and add TEMPHLD.
Every week or two, I just change the date on those lines and that keeps them visible in my register. I’ve done this for years and it works like a charm!
Strategy #3: Track Cash Expenses
You may have noticed in my first screen shot that there is an account under Banking called Cash Account. I created that to track my cash expenses. If you don’t do this, you’ll never really have a complete picture of how you spend your money.
Each time I take cash from the ATM, I simply do a transfer in Quicken and the money goes into the Cash Account. When I spend cash, I post those entries to that account just like I would if I wrote a check or charged on the credit card.
I always know to the penny how much I’ve spent and on what. This is such important data to capture. Without it you don’t really know how much it costs you to live, where you can reasonably cut back and how to plan for retirement. I wrote a two-part series on this, here’s Part I and here’s Part II.
Strategy #4: Upload Transactions To Stay Current
It took me years before I finally trusted the security systems and started uploading data from my banks. I wish I hadn’t waited so long! By doing this, I can easily update the current value of my investments and upload transactions to ensure I don’t miss anything.
For instance, I use the Ooma Telo for my phone service. They charge $3.82 a month to one of my credit cards. Because I never get a bill, I have to remember to enter the charge in Quicken, but not anymore! I see the charge come through and accept it. When I do bills pay through my bank, I manually enter the transactions in Quicken, but if I didn’t or missed entering one, they would automatically come in when I run the Update function in Quicken.
A Call to Action…
The ability for Quicken to support my personal style of money management keeps me using this tool. But there may be others out there that are just as good or better. If you don’t use tools, but found something in the post or comments that inspires you to try something new, please let us know what it is!
I thank you for reading and for your contributions.