It gives me bliss when my Quicken balance matches my on-line bank balance before I even begin to reconcile my accounts for the month. I could be overdrawn by $200, and I’d still be glowing inside so long as Quicken and the web statement matched to the penny. It’s even better since I actually have money sitting in the account! Now I need to reconcile with the paper statement — if that matches, too, all will be well in the world. (Then it’s time to update wesabe.)
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Hey, J.D.,
Do you reconcile all of your accounts? Just curious — I keep talking to people who say they don’t, and I wonder if I should encourage them not to worry about it, or if I should make it easier for people to do that.
For myself, reconciling sometimes gives me a good chance to remind myself of what I’m spending and whether I’m overspending; but sometimes it just feels like a headache, spending an hour chasing down the last $0.20 that I can’t seem to find.
Thanks!
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Hm. This sounds like a topic for a real article.
In short: yes, I do reconcile my accounts, and to the penny. Every month. I suspect this has more to do with anal-retentiveness on my part than anything else. (Actually, it probably stems from my chronic overdraft problem in the mid-nineties. When you’re living paycheck-to-paycheck, you need to know how much you have in the bank.)
My wife never reconciles her checkbook. She also (shudder) rounds every transaction off to the nearest whole dollar, essentially building some obscene cushion into her account.
I, too, sometimes have to spend an hour chasing down twenty cents. Sometimes it’s frustrating. But most of the time it’s actually kind of fun. But not as fun as having things balance from the start. That is financial nirvana!
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She also (shudder) rounds every transaction off to the nearest whole dollar, essentially building some obscene cushion into her account.
Have you heard of the new BofA checking account feature that does that automatically, and deposits the difference into your savings account? Although I do not like BofA, I thought that was a pretty cool idea. Makes balancing the checkbook easier and forces you to constantly add a little bit to your savings. Hopefully it catches on.
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Actually, Tim, I should clarify: I think it’s great that my wife does this. It’s an excellent way to generate small extra cash. But from a obsessive-compulsive financial standpoint, I could never do this! I think the BofA account sounds interesting!
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Quicken lets you auto-reconcile to the online balances, which is what I’ve been doing with my bank accounts. I enter checks directly into Quicken, so I don’t really reconcile against a checkbook, just the transaction download from the bank.
I reconcile to paper statements for my credit cards, though, because, I think, in the late 1990s, the transaction download from the bank didn’t always match up with the paper. It’s probably not a problem now, but I use the paper out of habit, and also to indicate when the statement period closes (and when I have to pay), so it’s a reasonable way to do things.
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J.D., I totally agree with you on the balancing to the penny thing. I’ve never gotten into the fancy-schmancy Quicken stuff, but I try to rectify my budget Excel spreadsheet balance with the online account balance at least once a week, keeping track of which items have cleared the bank and which haven’t. Inevitably, when I fall behind by a few weeks, there’s one receipt that I forgot to enter in, and I have to comb through the online statement and my memory to remember what it was.
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As far as the BofA “Keep the Change” goes– it stinks. You forget that they charge you $3/month when you use your savings account. I signed up thinking it would allow me to save extra.. After a month my savings account would accumulate an extra $2.50 .. after their fees I’d actually be NEGATIVE 50 cents. Don’t do it- it stinks!
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I must admit, I track all money that way. I have a PDA with SPB Finance 2 on it (and that syncs with MS Money on my home PC). It is really nice when I do the weekly check online with the bank that everything is already accounted for. It is SO worth that extra few seconds it takes to jot down the transaction. I am happy to say that I know where all my money goes. That doesn’t mean I am rich, but at least I am at a comfortable level of advisory control over all transactions. Money’s budget feature is quite good too (especially with cashflow predictions).
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I am considering buying Quicken or Microsoft Money, but I am not sure which one I should get. Any suggestions?
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@Jacob: Every year, PC Magazine reviews the latest financial management software and they do a good job. Their latest reviews are here: http://www.pcmag.com/category2/0,1874,1639156,00.asp.
Right now they give Quicken (the Premier edition) the edge over Microsoft Money, but it’s usually neck-and-neck.
Note for Mac users: Quicken for Mac is but a pale shadow of the Windows version, but it works…I’ve been using it for about 12 years now with few complaints.
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I don’t reconcile at all, and I never have.
I glance at the statement to check that no unusual payments went out (I use direct debit for everything I can). I phone occaisionally or use an ATM to find out the balance. I live off the budget in my spreadsheet. That goes down to zero each month, but in practice I use credit cards for some things and debit cards for others so it won’t reconcile easy.
Life’s too short for me to worry about things that I “know” I’ll never do.
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I have Quicken for Mac, 2005, and just don’t have the patience for it – can anyone say if it’s worth upgrading to the 2007 version?
I have found the Yodlee Money Center to be more my speed – once you put your info in you don’t really have to do anything. It has much more basic functionality, but it helps you budget, creates graphs, etc. Can anyone recommend other online alternatives to Quicken? I’ve heard good things about MSN Moneycenter.
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Despite all the great automate-y things that have been accomplished, I still manually reconcile my accounts in Quicken (for the Mac; brad’s right about it being less cool than Windows’ fare). I’m probably a little paranoid or something.
To me, the rounding of transactions to the nearest dollar seems too clever by half, kind of like setting your watch fifteen minutes ahead. If you know you’ve got a hidden cushion, what’s to stop you from taking advantage of it? Also: checking accounts don’t get very good returns, on average.
But, as always, do whatever works for you. (This phrase pops up so often here, I think it ought to be prominently displayed, kind of like how “personal finance that makes cents” is.)
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Heh. I set my watch fifteen minutes ahead, but rounding my dollars makes me tense.
Re: Quicken for Mac
I use the 2004 version, which was current when I last purchased a new computer. It does what I need to, even if it isn’t pretty, so I don’t feel a need to upgrade. This is particularly true since the reviews of each new version are generally awful. Quicken for Mac seems to be an afterthought for Intuit.
I also own Quicken Home and Business 2001 for PC (from before I switched back to Mac). It’s light-years ahead of Quicken 2004 for Mac. In fact, I’m really looking forward to installing it now that I have an Intel-based Mac running parallels. The interface is so much nicer.
But, as I say, I’ve been using the same version on my Mac for almost four years, and while it isn’t pretty, it gets the job done. Ah, how I long for the days when I used to use Andrew Tobias’ “Managing Your Money” on a Macintosh SE…
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Oh geez! Andrew Tobias? J.D., whoa! That gives away your age! (I used a Mac SE in college at 2400bps. Yeah. There’s no K on the units.)
I am a Quicken user. I think the 1996 Deluxe edition was best out of all the versions I’ve used. The latest one drives me nuts. I’ll probably get the 2007 Deluxe upgrade soon though.
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I am miserable at math and so I use a checkbook program on my palm pilot. As long as it is within $5, I do not worry. Yes, I can see you all staring at me in horror.
My husband uses his memory. He does not use any kind of written thing at all. He does not even look at his credit card statements, I’m pretty sure. And he pays bills at the end of the month, usually about 2 weeks after everything was due. So he pays a lot of late fees.
This is why all the utilities are in my name and I pay them on time.
And his method is, for me, a very good reason for us to have separate finances!!!!
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I round up religiously. I use Budget, which doesn’t synch to my online accounts, so whatever the difference between what Budget tells me my account balance is and what the bank tells me it is–that’s my found-money cushion. When it passes $50, I deposit it into my ING account and start “recushioning.” It works for me as a savings method.
I also use BofA’s Keep the Change program. I’ve never been charged a fee for my savings account with them (which is really just a money “holding pen” and the Keep the Change thing), and it’s a nice virtual equivalent to my real-life change mug.
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[...] I reconcile all of my banking accounts to the penny every month (with the exception of my cash on hand account). It can be bliss when your account matches what your bank is showing online, but if you’re like me…sometimes things do not match up and you need to do a little bit of detective work. [...]
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[...] to the penny every month (with the exception of my cash on hand account). It can be bliss when your account matches what your bank is showing online, but if you’re like me…sometimes things do not match up and you need to do a little bit [...]
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