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Jack,
Please forgive me for not acknowledging your post for a couple of days. Sometimes all the irons I have in the fire have to be snatched out at once, and even important things sometimes fall through the cracks.
I appreciate your interesting and detailed post, more than you could know. It very well illustrates a point that I'd like to make here.
I'd be willing to bet that some readers looked at your process and thought to themselves that it's a lot of work. More than they would ever do, even. Probably in the beginning, until you had established the good habits of keeping it up to date, it did seem like a chore.
I followed a similar manual procedure for over 20 years, first entirely by hand and then in electronic spreadsheets when I learned to use a computer in 1983. Even when I began to use MS Money (which my bank provided free) to download checking account transactions, I had to continue my manual spreadsheet method because Money wouldn't show me what I had left in a budget category. Only what I had already spent.
I estimate that I averaged nearly 6 hours a week managing that system. Between finding and correcting errors, shifting money from one column to another, adjusting here and there to reflect changing income (in both directions), it was a real chore; one that I wouldn't have done if I didn't actually enjoy the analytical process and have a detail-oriented bent.
Over the years, many people asked me the question I asked you, in various ways. Because of the system, I always managed to pay the bills on time and it gave the impression that we were better off financially than we actually were. But the minute I started describing that system each and every one of them said, 'thanks but no thanks'. It was simply too complicated for most people to bother with.
That's why I was so excited to find the program I now use and promote. All automated, no manual input, tracks credit card as well as bank transactions AND shows me my planned spending and what I have left. Even if that were all it did, I would love it, but it's only a piece of the whole package!
All the time I was doing my manual process, I wasn't clever enough to implement a tracking system like yours for my credit card expenditures. Blind spot, I guess. So more often than I would have liked, it turned out that I had spent more than I realized (easy to do with four kids). Then a balance got left on the card, and to quote the old maps, 'Here lie dragons.'
My new program allows me to allocate those transactions to the appropriate budget line in an easy graphical interface. The amount is immediately debited and transferred to the "Debt/Payments To" budget line. As the credit card balance goes up, so does the 'pay it back' balance, dollar for dollar and the money is there when the statement comes.
Meanwhile, the budget categories I'm tapping show me when to quit spending until cash flows in. No more balances on the credit card, ever! No more interest payments, and thank goodness! Credit card companies get testy when you don't pay them any interest and raise your rate in the hope of catching you, but I get to use their money while keeping mine in an interest-bearing checking account, get a rebate for my purchases and not care what my interest rate is. Sweet deal!
Well, I won't advertise further because that's not what this forum is about, but when you give me an opening like that, I grab my soapbox and run through it, lol.
Thanks for a fascinating and succinct description of how a money-savvy individual like yourself manages it.
Cheri
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