How much time does quality money management really have to take?

By Lauren Elkins

For the Deseret News

Published: Monday, April 28 2014 10:30 a.m. MDT

The balance sheet gives you an excellent snapshot of your financial health. Over time, you want to see that net worth number creep up as you pay off debts, save more money and grow your retirement accounts. It’s exciting and worth celebrating when you hit a big number: $10,000, $50,000, $100,000.

Know your spending habits

Tracking isn’t meant to make you feel guilty about how you spend your money or to stop you from spending anything. Spend as you normally would so that you can start to show a pattern. When you can highlight habits, you will make better decisions about spending and budgeting later on.

After I’ve been tracking my expenses over time, I now have data to look at. Here’s what I now know:

Income minus expenses over time, or the “gap.” How well are you truly spending? Do you spend less than you earn? This number should be as wide as you can manage, and if you see it narrowing, stop and review what expenses went up or income went down.

Assets minus debts over time: the growth of your net worth. You want this to steadily go up over time. The scary thing, though, has been the economic market these last few years, and I’ve watched my net worth jump off the stock market and real estate cliffs, then slowly climb back up.

My other tips and tricks:

My husband and I share most of our accounts. I know that this doesn’t work for all couples, but for us, it’s great since I have the job of tracking expenses and see it all in one place.

I set up a separate Google calendar called “money calendar.” I entered the date that a monthly expense currently occurs (like the 15th of each month) and the average amount ($80) as a recurring event. I do the same with paychecks. That way, when I check our money, I can do a quick check of the calendar and see, “until the next paycheck, what expenses will be paid out of our account, how much are they, and do we have enough to cover them all?”

Use charts. I love seeing the charts, especially the slow climb of our net worth as we carefully manage our money over the years.

Calculate your net worth at the same time each month. If you always do it on the 15th of the month, you have one mortgage payment, one electric bill payment, one credit card payment, and so on, with each reported account summary.

I don’t like to depend on Quicken or Microsoft Money because they require updating (buying a new copy every few years). I tried using Mint.com, but I had to review every transaction in there to categorize it accurately and match that to my bank account so that I could balance my checkbook, if you will.

We automate every expense that we can: rent, gas, electric, Internet, cellphones, even our gas cards. That way, I’m not worrying about dinging my credit score with an unpaid bill that got stashed somewhere in the pile.

Lauren Elkins writes randomly on her blog, tweets periodically about who knows what, and spends her regular days conversing with computer programmers. By the time she gets home at night, she is mighty happy to see her husband and son.

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