Apps and Spreadsheets and Paper, Oh My!

Financial Planning /
Favorite Posts

When it comes to how we view money management, we’re often guilty of making monsters out of ideas or processes that we just don’t understand.  Don’t be afraid of the myriad helpful tools available to assist you in becoming financially literate and fiscally smart.  At the same time, don’t believe in every new shiny thing as the answer to all your challenges.  Money management technology can make your life simpler – or not, depending on your needs, your situation, and your goals.

Several years ago, I decided to move my budgeting and money management to a computer program. Up until that point, I used plain old paper and a spreadsheet to keep myself organized. I purchased Quicken and set to work*.  It wasn’t that difficult to set up, but I found the maintenance of it to be onerous, primarily because I would let it go for a month or more at a time, and then I would have to spend hours catching it up.

My motivations for moving to Quicken to manage our money were two-fold.  As a financial planner, I am always looking for ways to help clients, and that includes being able to recommend efficient, effective tools.  My second reason was to get a better grip on where my husband and I were spending our money.  I spent about a year or so managing our finances with Quicken, and then I stopped.  To be completely honest, I missed my paper and spreadsheet.  While I thought Quicken was a fine tool, it just wasn’t for me.

Since then, my spreadsheet has expanded into an Excel workbook, with many sheets for various financial tracking purposes.  But just because I do it that way, doesn’t mean you have to.  I think too often with budgeting and financial management, people think they have to be elaborate with their processes.  Frequently that leads to buying or downloading a program or app that will miraculously fix your budget!

But my experience over the years validates the idea of “Garbage in, garbage out.”  With Quicken and the other handful of apps I have tried, if you really want to get good, useful data and reports, you’ll only get there if you spend quality time on the input side of things.  Software systems and apps typically make it easy to get your data downloaded from your banks and credit cards, but very frequently the way they categorize and organize transactions isn’t how you’d like it to be.  It takes a little effort, but to get the best use out of money management apps, you must dedicate some time to reviewing all the downloads, checking the categorizing, and looking for other weird odds and ends that might occur.

It is also helpful if you understand how net worth statements and personal cash flow statements are built.  If you don’t understand the basics, then when your computer spits out a report, how will you be able to understand what the report is telling you about your finances?

If you are game to learn the program or app and spend the time to ensure the data is correct, you can have beautiful financial reports at your fingertips, complete with any manner of colorful corresponding graphs.  Fancy!

On the other hand, if you’re anxious about the time commitment or you feel like too much of a beginner, don’t hesitate to start with a paper version.  If you like spreadsheets, you can hit the middle ground:  They can be easy to establish, like a paper version, but you can also pretty them up and add colorful graphs if you please.

Just choose a method and get busy – that is the main thing.  Paying attention to where your money is and where it goes is paramount to being successful financially over the long haul.

What tools have you tried?  Tell me about them!

*I am not a Quicken affiliate.

Leave a Reply

Your email address will not be published. Required fields are marked *