Be Accountable To Your Accounting

I am constantly amazed at Retire By 40’s accounting wizardry. Don’t get the wrong idea. He’s not using accounting tricks like the crooks on Wall Street. He is using Simpler Monthly Accounting to keep track of his inflows and outflows. I was so hypnotized that I asked him about it a few times. He explained his accounting method and also shared some best practices.

Minimal Active Accounts

I scanned my Mint account and saw a few accounts that were being underutilized. I chopped off a debit card and an unused checking account. Immediately I felt like I was more in control of my finances. I suggest you do an assessment of your accounts and close the ones you aren’t using regularly. Thinking back, I artificially inflated my ego by “managing” all my accounts. All it did was create busy work. Life is complicated enough, do what you can to simplify.

Categorize Expenses

I’ve been using Mint for awhile, but I got lazy. After setting up my accounts, I forgot about it. I would login to check for errors, but I wasn’t diligently categorizing unknown expenses. Making a point to do this going forward forces me to be more active with my Mint account.

Final Thoughts

Initially I was mesmerized by Retire By 40’s accounting magic. In actuality, it was his amazing inflow and outflow reports. He recently had a baby and he spends so little! I now realize I wasn’t being diligent because I didn’t want to see my less than stellar savings. Perhaps I also knew my savings practices couldn’t compare with RB40, so why even bother? I kicked both of these unproductive mindsets to the curb and faced my situation head on with no excuses. I am now accountable for my accounting. I am tracking my basic inflows and outflows and being more diligent with my Mint account. I recognize my savings needs work, but burying my head in the sand is the worst possible choice. If you need more convincing, check out My Journey To MillionsAccountability Will Lead To Success.

How is your savings going? Do you track your inflows and outflows? Are you diligent with your Mint tracking or do you set it and forget it?

Stay Inspired!

Featured By

The Financial Blogger posted Yakezie Challenge Time and featured Tire Shopping

Accountant By Day posted Are you fatty and spacious? and featured Eating Out Is Cheaper Than Cooking

101 Centavos posted Eating Out or Staying In, Which Is Better? and also featured Eating Out Is Cheaper Than Cooking

Life And My Finances posted Goal Update and Weekly Round-Up #30 and featured The Change-Up: Who Said Men Can’t Change?

Minting Nickels posted How You Can Help Us with Our Spousal Challenge, and Links and also featured Eating Out Is Cheaper Than Cooking

Guest Post

Thanks to Barbara Friedberg for hosting Impulse Buying Impresses No One

You may also like...

19 Responses

  1. I track everything…and I love it. It keeps me on task as to what I have spent and what I still need to buy. It has really added to transparency in my marriage since my husband can quickly look at my “clothing budget” and see how much I have spent to date and how much I still plan on spending.

  2. Andrea says:

    My savings is a little better than it was a year ago, there is still room for improvement, I’m starting to keep receipts for everything I buy, and I check them at the end of the month to see how much I’ve spent, I like, because every month I get a reminder from them about how much I’m over budget for.

  3. krantcents says:

    My approach is quite a bit different. I take my savings out first through a payroll deduction and live on what is left. I analyze (periodically) my expenses to determine if they are at their lowest. When I pay my bills I look for changes in my expenses (exceptions) that may require some action. In other words, my budget is certainly non-traditional, but it works for me. I would not suggest this method to anyone.

  4. Squirrelers says:

    In the past, I micromanaged every penny. Yes, I really did! Every cent that was spent was recorded.

    My approach shifted, though, to “auditing” myself for a month or two every year or so, just to make sure my spending patterns were on track.

    Now, as it’s been a bit too long since I have done this type of audit, I’m revisiting the whole idea of tracking. Actually, I’m thinking of going back to a level of micromanaging, to see how that goes. It’s all about the time investment to me – if I could micromanage pennies without undue effort, I’ll do it!

    Being informed is a good thing!

    • Buck Inspire says:

      You really are a squirreler! Is your significant other as penny pinching as you? Auditing and micromanaging has its benefits. Since I don’t go to crazy with spending, it is kind of fun managing my money. Maybe I’m a control freak to a certain degree.

  5. Yes, this is one thing we like to stay on top of. Every transaction is recorded in Quicken. Very AR, but I think we need to be when it comes to understanding cash-flows. It’s useful to know what your net worth is, anytime. I think it just plummeted today.

  6. I don’t use Mint, but I do track everything on my own. It helps that I only use one credit card and almost no cash (and I pay off the card each month) so it is easy to keep track of everything.

  7. Untemplater says:

    I only have two credit cards which is definitely a lot easier to manage than when I had four. As soon as I get my paycheck I put my disposable income straight into savings and only leave what I need for bills in my checking account. It’s been working out really well and prevents me from withdrawing from my savings. -Sydney

  8. FinEngr says:

    A weekly and often daily user of Quicken – I’ve been trying to consolidate accounts for some time. It is not only a hassle to upkeep, but a nuisance come tax season!

  9. Thanks for featuring me. 😉
    I used mint for a few months and I find it hard to be diligent about it. Now, I just use excel and fill it out a few times a month. It really helps when you have a solid goal too – our goal is to live on one paycheck. We really need to keep careful accounting to make sure we can handle it.

Leave a Reply

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

Protected by WP Anti Spam