In 1996, while in the military, earning below poverty level, my wife and I managed our pennies and nickels using the plain old checkbook register. When I was finally able to save up enough to upgrade my IBM PS2 to a flashy new Packard Bell XT, we noticed it came preloaded with Microsoft Money. Just out of curiosity, we gave it a try. Eleven years, thousands of transactions, dozens of banks later, we still use it, a new version obviously, but still reliable old MS Money.
Through financial good times and bad, MS Money has helped us tremendously over the years. From budgeting to savings, it allowed us to instantly take a snapshot of our financial status, and tweak it as needed. It helped us get through a rough patch in 2000 that brought us nearly to bankruptcy, to currently managing our net worth. Most of all, it allowed us to track our spending trends over time; which is the REAL power of any financial management tool. This information empowers you, by showing you where and what you spend your money on, and how you can reduce it.
To call be a MS Money fan is an understatement, I’m more of a MS Money Evangelist, trying to convert everyone I know to some kind of financial management tool, be it Money or Quicken. I have friends that do not balance their checkbook, let alone track their spending. Some of which make more money (inflation adjusted), than we used to, and live at a lower standard of living than we did. Convincing them that money management is one of the keys to success, is difficult. I try to explain, that without knowing where their money goes over time, how can they possibly change their spending and savings habits? Without balancing your banks transactions, how can you be sure they are not making mistakes?
In the 10+ years that I’ve been using MS Money, I have caught dozens and dozens of errors by the banks. Some have benefited them, some me. Some small and some large enough to require drastic action. If you are not auditing your accounts, I will almost guarantee you’ve been screwed, probably a lot more than once.
While it bugs Jennifer, I love to look at our spending over long terms. I guess it is that Accountant in me, trying to escape. Check out the charts below. You will definitely see some trends that were out of our control.
Automobile Fuel 1997-2008
Medical Expenses 1997-2008
Food Expenses 1997-2008
(we added another mouth in 2000)
If you have not started managing your money using an automated system, start today. While it will feel painful for a few weeks or even months, you will quickly see the benefits.
Poll: How to do you manage your money? Submit your answers in the comments.