Record Keeping

It is important to budgeting to keep good records of what your expenses are. I like the computer program quicken it allows for managing and tracking of multiple accounts and seeing that I have several accounts it works well to keep all of them in the same place. Another important feature it has is categories so when you record a transaction you tell the program what category of spending it should put it in. If you use the categories well you can print a report at the end of a month or week or however you like and it will do the totals for you.

Other options for record keeping are bank statements, credit card statements, and the good old balancing the check book act. The best way to use the bank statements or credit card statements would be if all your transactions went through that account so you can see by looking at one paper what expenses you had in a month. This is a fine method of record keeping but you will need to note what the specific purchases fit under as far as categories and then sum up the categories yourself. For the balancing your check book approach that is something that should be happening anyway to check against your bank account but to keep track of your expenses with pencil and paper can be tedious and falls by the wayside easily if you don't stay on top of it.

I use the computer program approach as I mentioned before, but I mix it with the bank statement approach with access to online banking this lets me check against the banks record and do a day to day balancing act. It is a good idea when using the computer approach to use online banking to your advantage to keep up regularly on spending then at the end of the month you can look at your reports and compare them against your budget or use them to create a budget.

More on Q and A Session

This is more from our session with our church leader.

Question: Should we be looking at life insurance and what type?
Answer: Especially if you have children you should consider getting life insurance. This is especially important for the bread winner of the family. Term life insurance is a relatively inexpensive way to go because it does not build a cash value.

I will also discuss insurance more later.

Question: Should we have a will?
Answer: The main reason at our age to have a will was to designate guardianship of our children if we did not have a will covering that then the state decides the fate of the children.

Questions were also raised about budgeting and retirement investing.

With budgeting one of the main points was to review a few months statements if using a credit card approach and budget using the past as your guide, be careful with food purchasing a lot of money can be wasted on nonessential foods, start with set expenses such as church/charitable donations, rent, utilities, and others.

With retirement we discussed the approach of starting good habits now, Aiming for home ownership, IRA accounts and a few other things I will discuss in detail later.

We also discussed government aid programs and the opportunities available to get help with medical insurance, grocery shopping, and home buying. These will be other things I will try and cover in depth as well.

Question and Answer Session

I recently had the opportunity to attend a church sponsored session with a leader in our church where he spoke to some young married couples about financial management and I am going to post a few things covered in that here.

He talked about how April showers bring May flowers meaning that the more we can do early in life the more it will help us later on establishing good habits makes a big difference in life.

3 reasons for credit cards
You get a detailed monthly statement which can help you follow your expenses (Useful in Budgeting)
Very convenient to use
Possible minor benefits such as air miles

I would add to this the concept of improving your credit history

Warnings on credit cards, they are one of the worst ways to borrow money, pay them off every month and do so as soon as you get the bill. He mentioned that missing the payment by even a day can bring all sorts of extra charges that may not even make sense as well as raise interest rates on all of your credit accounts not just the one card you missed. There is a term called Universal Default which means for a late bill payment of whatever type be it utility or credit card or whatever interest rates can go up for everything because of 1 missed payment.

Rule of thumb: Don't spend what you don't have