After mooning over the gorgeous pics in today's journal, I needed to make a tangible step on my journey to independence on this July 4th. So I reread most of your financial info page and reviewed your 2007 budget.
How often do you enter data?
Do you still follow the Dave Ramsey cash is king credo? We did for a while and then is seemed to get difficult (or we lost focus)
Judy
Howard said
12:42 PM Jul 4, 2007
Judy,
Answer for Question 1 We keep a running spreadsheet of our expenses and we record every single penny. When we first started, we would record our expenses in the spreadsheet every single day. Now we do it about once a week. If we go any longer than that, it becomes a pain to catch up.
We put all receipts in a little basket by the computer. We try to get a receipt for everything, but when we don't we immediately write our cash purchases down on a piece of paper and place those with the receipts.
So all the little receipts stare at us until they are recorded on the spreadsheet. Then the cash receipts get tossed and the non-cash receipts go into another basket where they wait for Linda to record them in the checking account register.
Then they go into another basket where they wait for the online bank statement. Then Linda reconciles the bank statement. We keep the "business" receipts for our records and everything else gets tossed (unless it is a big purchase where we might need it for a return or warranty).
Short answer: We record data at least weekly.
Answer for Question 2 We are on a sort of a modified "cash is king" system. We do NOT use credit cards - ever. We have one for emergencies, but we have not used it.
We use our debit card for almost everything. Dave likes debit cards, but he still says you spend more with debit cards than you do with cash and I agree with that statement. Paper cash money is just psychologically harder to hand over than plastic money.
However, the debit card is the next best thing to cash. And we don't want to carry a lot of cash or run to an ATM often (even though our account reimburses us for ATM charges up to $250 a year). We get $200 in cash about every three months.
Our VISA debit card gives us reward points (no big deal) AND the charges are not taken out of our checking account until the end of each month. So we earn interest for a few to several days on money that has already been spent.
So we never use credit cards, we rarely use checks, we rarely use actual cash, and we almost always use plastic cash in the form of the debit card.
So if "cash is king" means actual paper money, the answer is "no, we don't follow that credo". But if "cash is king" means we don't use credit or spend what we don't have, the answer is "yes, we do follow that credo!"
Sorry for another longwinded answer, but we have been asked those questions before, and I thought I would take the opportunity to elaborate for others and not have to type out the answer again for awhile.
I love the Forum! It saves me so much time in answering emails.
-- Edited by Howard at 13:45, 2007-07-04
Judy the Other said
04:24 PM Jul 4, 2007
Thanks for taking the time to answer. I occasionally need a financial you-can-do-it peptalk. There are so few people who think about what they spend, still fewer who know where their money goes and even fewer who are debt-free, that the opportunities to discuss these topics are slim to none in the "real" (non-electronic) world. I will say that in our experience we did spend less with the cash envelope system-I get the "well, I'm spending money anyway one more thing won't hurt" mentality-which does hurt in the long-term.
The Dave Ramsey boards are sometimes informative but there's a whole other agenda there.
Now back to my basket of receipts.
Judy
wmalefyt said
05:33 PM Jul 4, 2007
Howard,
Have you ever thought about using Quicken? I have used it for probably the last 10 years and find it very useful for tracking expenses by various categories. It also comes in very handy at tax time as you can download to Turbo Tax and other tax preparation programs.
Regarding spending, we use our credit card for most major expenses, including weekly shopping. The credit card balance gets paid off every month by direct debit from our MM account so no worry about getting hit with interest on the unpaid balance. We also get points which as you said is no big deal, although we will soon be receiving a $100.00 credit to our Visa account for points accumulated.
Debit cards scare me a bit since you read so much about people stealing PIN numbers. With a credit card I don't think you are responsible if someone uses your card number illegally, not sure how that works with debit cards. Also, with a credit card you can protest a charge if you have a problem with the product or service purchased.
Donna162 said
05:55 PM Jul 4, 2007
Just a quick note about a debit card experience my daughter had. She was working in Iraq and used her debit card for everything. She shopped mostly online and at the base where she was working. Somehow, someone in CA started using her debit card at an ATM. Don't know how they got the card or the PIN number. She monitored her checking account online daily so she notice the withdrawals immediately. The theif managed to still withdraw around $600 from her account. The whole point of this is not to scare you from using your debit card but to let you know that she got all her money back from the bank insurance company except a $50 deductible. It did take about 8 weeks to get the money back but she did.
I have also started using Quicken beginning the first of this year and think it will be a great time saver as Bill has mentioned above. I've had the program for quite a while but thought it was going to be too hard to figure out; but, I have to say it's not and I love the fact that I can reconcile with my online banking account daily if I want too.
Howard said
10:53 PM Jul 4, 2007
I have used both Quicken & Quickbooks in the past. But I'm just comfortable using my spreadsheets and various formulas to get what I need. Still gotta do the data entry.
As for the debit card, we have never told anyone it is a debit card and we never use our PIN unless we are at an ATM. When asked "debit or credit" we always say "credit". No problem.
As long as the debit card is a VISA, Mastercard, etc. debit card owners are entitled to the same protection as for credit cards.
bago40 said
01:17 AM Jul 5, 2007
This place never ceaces to amaze me!!!I am looking to expand my world with some of the buisness You all talk about!, but, you guys are just ahead of me a bit. What a blessing!Thanks Howard this answered alot of questions for me! This experience just keeps getting better all the time. I like the spreadsheet and no credit philosophy.
Judy the Other said
07:51 AM Jul 5, 2007
Regarding using the credit card for everyday expenses, for those with lots of willpower and the ability to pay it off every month, it's probably not so crucial. But the CC companies know that if you have that plastic in hand you are going to spend more. Thus they are marketed so heavily to those in their young, wild, hormonally driven years. Spend Now, Worry Tomorrow! You are Ours for Life!
I use Quickbooks for my little home business and Money for personal accounts. While those programs can make things easier, it can take a long time to wade through the bells and whistles and figure out what you really need from it. Sometimes I think just figuring out the information I want and need and building a spreadsheet for that would allow me more control-and I am all about control!
Judy
bjoyce said
10:53 AM Jul 5, 2007
I use Microsoft Money (2006 these days) and enter the data daily. I also download the financial data that I can download automatically every day. Keeps the stack of receipts under control and lets me catch any strange financial transactions. Luckily we have had no strange financial transactions that were fradulent. I have financial data from 1993 forwards in the system. I used Money Counts until Quicken bought them and made me upgrade to Quicken. Didn't like Quicken, didn't like Money, but Money irritated me less. We are very disciplined and use credit cards for everything and pay them off every month. We get lots of restaurant gift cards from the points, we have no interest in airline points. We were disciplined on credit cards for a long time before we went full time. My father was a banker and it just comes natural for Diane. We have both worked on financial software during some of our software development careers. It has at least been five years since we have used a debit card for anything but getting cash.
jcw said
09:40 AM Jan 21, 2008
Howard wrote:
So all the little receipts stare at us until they are recorded on the spreadsheet.
Howard,
I just began using a spreadsheet to keep track of our expenses. I started out with categories that jive with the budget spreadsheet line items.
However, I have a dilemma. All 'Household' entries (for example) are not created equal. But the details get lost when all I do is add another value to the cell.
So, I was thinking of keeping a journal in which I would make a line item entry for each purchase, thereby documenting what it actually was, then check a box or something to classify that purchase as to which budget category it belonged to. Then at the end of the month I could transfer those column totals to the 'Actuals' spreadsheet.
But that all seems like a lot of work. Do you find it necessary to document things that way or are you content to just stick the values of the purchases into the generic categories and forget about it? I know I could always go back to the actual receipts (which I file by month) if I ever really wanted that level of detail.
So, in summary, do you keep a line item journal in addition to the monthly actuals spreadsheet?
thx...
-- Edited by jcw at 09:41, 2008-01-21
Howard said
12:21 PM Jan 21, 2008
JCW,
Yes. We do have a line item spreadsheet where we record the following for each receipt:
Expense Description Expense Type Date Payment Method Amount
Actually, those headings are across the top of the spreadsheet.
The Expense Type corresponds to the Budget Categories. Rather than typing those in, I created a drop-down box so we can just select the proper category.
Then, at the end of the month, I do a Data Sort by Expense Type so that all expenses are grouped together for easy totaling and transfer to the monthly summary spreadsheet. This is the step that can be made easier by the accounting softwares like Quicken, Quickbooks, and Money.
I think that is what you are asking. If I misinterpreted, let me know.
bjoyce said
01:15 PM Jan 21, 2008
Howard: I take it you use a different line item spreadsheet for receipts every month to make those sorts come out? Otherwise you could use another "sheet" for the receipts and for the main spreadsheet.
Howard said
02:53 PM Jan 21, 2008
Bill,
You should know by now I'm terribly anal.
I do have different line item spreadsheets by month. It's a lot more complicated than that. I have all kinds of checks and balances, and with a quick glance we know where we stand anytime during the month or year. It's probably overkill for most folks.
bjoyce said
04:22 PM Jan 21, 2008
Howard,
I should have known you would be using separate spreadsheets and being very detail oriented (nicer term). Complex spreadsheets are notorious for errors because the formulas get hidden and it is easy to miss mistakes, so more and simpler spreadsheets should check and balance with less mistakes.
I trust Microsoft Money to handle most of that myself. I do have a spreadsheet that keeps track of camping and fuel expenses the way I want, like exactly what a campground stay costs including deposits.
Judy
Answer for Question 1
We keep a running spreadsheet of our expenses and we record every single penny. When we first started, we would record our expenses in the spreadsheet every single day. Now we do it about once a week. If we go any longer than that, it becomes a pain to catch up.
We put all receipts in a little basket by the computer. We try to get a receipt for everything, but when we don't we immediately write our cash purchases down on a piece of paper and place those with the receipts.
So all the little receipts stare at us until they are recorded on the spreadsheet. Then the cash receipts get tossed and the non-cash receipts go into another basket where they wait for Linda to record them in the checking account register.
Then they go into another basket where they wait for the online bank statement. Then Linda reconciles the bank statement. We keep the "business" receipts for our records and everything else gets tossed (unless it is a big purchase where we might need it for a return or warranty).
Short answer: We record data at least weekly.
Answer for Question 2
We are on a sort of a modified "cash is king" system. We do NOT use credit cards - ever. We have one for emergencies, but we have not used it.
We use our debit card for almost everything. Dave likes debit cards, but he still says you spend more with debit cards than you do with cash and I agree with that statement. Paper cash money is just psychologically harder to hand over than plastic money.
However, the debit card is the next best thing to cash. And we don't want to carry a lot of cash or run to an ATM often (even though our account reimburses us for ATM charges up to $250 a year). We get $200 in cash about every three months.
Our VISA debit card gives us reward points (no big deal) AND the charges are not taken out of our checking account until the end of each month. So we earn interest for a few to several days on money that has already been spent.
So we never use credit cards, we rarely use checks, we rarely use actual cash, and we almost always use plastic cash in the form of the debit card.
So if "cash is king" means actual paper money, the answer is "no, we don't follow that credo". But if "cash is king" means we don't use credit or spend what we don't have, the answer is "yes, we do follow that credo!"
Sorry for another longwinded answer, but we have been asked those questions before, and I thought I would take the opportunity to elaborate for others and not have to type out the answer again for awhile.
I love the Forum! It saves me so much time in answering emails.
-- Edited by Howard at 13:45, 2007-07-04
The Dave Ramsey boards are sometimes informative but there's a whole other agenda there.
Now back to my basket of receipts.
Judy
Have you ever thought about using Quicken? I have used it for probably the last 10 years and find it very useful for tracking expenses by various categories. It also comes in very handy at tax time as you can download to Turbo Tax and other tax preparation programs.
Regarding spending, we use our credit card for most major expenses, including weekly shopping. The credit card balance gets paid off every month by direct debit from our MM account so no worry about getting hit with interest on the unpaid balance. We also get points which as you said is no big deal, although we will soon be receiving a $100.00 credit to our Visa account for points accumulated.
Debit cards scare me a bit since you read so much about people stealing PIN numbers. With a credit card I don't think you are responsible if someone uses your card number illegally, not sure how that works with debit cards. Also, with a credit card you can protest a charge if you have a problem with the product or service purchased.
As for the debit card, we have never told anyone it is a debit card and we never use our PIN unless we are at an ATM. When asked "debit or credit" we always say "credit". No problem.
As long as the debit card is a VISA, Mastercard, etc. debit card owners are entitled to the same protection as for credit cards.
I use Quickbooks for my little home business and Money for personal accounts. While those programs can make things easier, it can take a long time to wade through the bells and whistles and figure out what you really need from it. Sometimes I think just figuring out the information I want and need and building a spreadsheet for that would allow me more control-and I am all about control!
Judy
We are very disciplined and use credit cards for everything and pay them off every month. We get lots of restaurant gift cards from the points, we have no interest in airline points. We were disciplined on credit cards for a long time before we went full time. My father was a banker and it just comes natural for Diane. We have both worked on financial software during some of our software development careers. It has at least been five years since we have used a debit card for anything but getting cash.
Howard,
I just began using a spreadsheet to keep track of our expenses. I started out with categories that jive with the budget spreadsheet line items.
However, I have a dilemma. All 'Household' entries (for example) are not created equal. But the details get lost when all I do is add another value to the cell.
So, I was thinking of keeping a journal in which I would make a line item entry for each purchase, thereby documenting what it actually was, then check a box or something to classify that purchase as to which budget category it belonged to. Then at the end of the month I could transfer those column totals to the 'Actuals' spreadsheet.
But that all seems like a lot of work. Do you find it necessary to document things that way or are you content to just stick the values of the purchases into the generic categories and forget about it? I know I could always go back to the actual receipts (which I file by month) if I ever really wanted that level of detail.
So, in summary, do you keep a line item journal in addition to the monthly actuals spreadsheet?
thx...
-- Edited by jcw at 09:41, 2008-01-21
Yes. We do have a line item spreadsheet where we record the following for each receipt:
Expense Description
Expense Type
Date
Payment Method
Amount
Actually, those headings are across the top of the spreadsheet.
The Expense Type corresponds to the Budget Categories. Rather than typing those in, I created a drop-down box so we can just select the proper category.
Then, at the end of the month, I do a Data Sort by Expense Type so that all expenses are grouped together for easy totaling and transfer to the monthly summary spreadsheet. This is the step that can be made easier by the accounting softwares like Quicken, Quickbooks, and Money.
I think that is what you are asking. If I misinterpreted, let me know.
You should know by now I'm terribly anal.
I do have different line item spreadsheets by month. It's a lot more complicated than that. I have all kinds of checks and balances, and with a quick glance we know where we stand anytime during the month or year. It's probably overkill for most folks.
I should have known you would be using separate spreadsheets and being very detail oriented (nicer term). Complex spreadsheets are notorious for errors because the formulas get hidden and it is easy to miss mistakes, so more and simpler spreadsheets should check and balance with less mistakes.
I trust Microsoft Money to handle most of that myself. I do have a spreadsheet that keeps track of camping and fuel expenses the way I want, like exactly what a campground stay costs including deposits.