We spend so much of our time and energy managing our finances, budgeting our spending, preparing for retirement – it can be all-consuming and make us feel pretty lost at times. That’s why it’s so important to have a good system in place for your own finances management.
A year ago, I found my own finances to be in quite a state of disarray, having investments scattered across 5 different brokers, a left-over 401k lying dormant, and credit cards that were neither convenient to use nor properly rewarding. It was all such a headache to keep track of, and even harder to comprehend. So I spent the better part of 2012 working to consolidate all of my finances, banking & investments under one easily managed roof.
Now that I’ve successfully managed to do all that, I want to share my experiences with you and help you achieve the same state of financial solidarity.
When I quit my nice cushy Google corporate job back in March 2011, I had to become extremely careful about my finances and tracking each expense. So I came up with My Finances Google Spreadsheet, which I’ve now also made into a template so I can share it with you as well.
It’s a fairly robust system, complete with a 4-week budget that I first set for different categories of spending (i.e. dining out, groceries, parking & gas, rent, etc) and then tracked my expenses against on a weekly and monthly (or 4-weekly) basis. I’ll admit it is a lot of manual work to enter in each expenditure, which I kept up consistently once a week, but it really did allow me to keep a close eye on everything, so it was well worth it.
That said, I still felt like were are a great many ways I could further improve my overall finances. And being in the state I was in really pushed me to re-evaluate everything and explore other systems that have been pre-designed and built especially for easier and more efficient finance management.
Then came the hard decision of what to use. For me, that meant one question: To Quicken or to Quickbooks?
The main, or at least most obvious, difference between the two is that Quickbooks offers you double-entry accounting capabilities, while Quicken is more single-entry, checkbook style accounting. However, since we’re talking more about managing personal finances, rather than business, this probably isn’t a very significant detail.
What might interest you more is knowing that Quicken will be much simpler, with less bells and whistles, and therefore easier to learn. It also has features for tracking stocks and investments, while Quickbooks does not. And it’s significantly cheaper.
On the other hand, Quickbooks offers a great deal more functionality if you DO want a system that can help manage your business AND personal finances, including more extensive reporting, multi-level Classes to categorize expenses, both inventory and payroll management, invoicing, and the ability to give access to multiple users (Quicken is strictly single-user).
Looking at my individual situation, I decided it would be a smarter choice to start with Quicken first, since it is much cheaper and still very easy to upgrade (and import all my data) to Quickbooks if I do find I require more functionality later on.
In the end, I ended up going with Mint.com — since that is the online version of Quicken. (Quicken Online used to exist, then they bought Mint.com and decided to sunset their own online product.) And I have to say I have been extremely happy with it. It’s even allowed me to stop spending the extra time maintaining my manual Finances Google Spreadsheet, since you can just sync your Mint.com account with all of your banks and investment accounts and have all expenditures automatically uploaded for you.
Consolidating My Investments
The other crucial part of my goal was to consolidate my investments into one easy-to-manage system. As I mentioned, I had stocks and mutual funds scattered all over the place, and hadn’t the vaguest idea how any of them were performing. So I collected all my latest statements, laid them all out in front of me, and made a very important decision. I chose ONE broker to manage them all.
This was a hard decision, but it came down to what mattered most to me in a brokerage. I wanted a place where I could just set-it-and-leave-it, and didn’t care as much about low trading fees since I don’t intend to do that much active trading. What I did care about was knowing I’d have good advice and support in the event I do decide to adjust something, and an expert eye helping keep tabs on all of it in the meantime. But most importantly, I wanted to keep it all in the same place as my banking and credit cards, so I’d only have to log into one interface to see everything.
With all this in mind, I made my final decision to go with Chase Investment Services. I already banked with Chase, had credit cards with Chase, and had no complaints or desire to change that. Plus, they did offer everything else I was looking for in a brokerage. So it made perfect sense.
Armed with this decision, I met with a Chase Investment Services adviser and together we slowly moved all of my random stocks, funds and even my old Google 401k into shiny new accounts with Chase. Now when I log into my Chase online account, I can see my bank accounts, credit cards, AND investments all in one nice n’ neat view. And I couldn’t be happier.
Now I’m running out of room in this blog entry (and no doubt you are running out of interest in reading), so I’ll wrap this up with one last piece of personal wisdom:
It doesn’t matter how much you have, it’s what you do with it that matters.
So try out these tips, and find your own ideal system for finances management, and perhaps you too can find greater sense of self & peace of mind.
Questions? Comments? Absurd Ideas? Feel free to comment on this post and share!